Have you saved — at all — for retirement? Have you thought about it?
If you haven’t, you’re not alone.
More than half of New York’s private-sector workers — about 3.5 million people — don’t have access to an employer-sponsored 401(k), according to AARP. Statistics show that in NYC, lower-wage workers, and those employed by firms with 10 or fewer employees, are least likely to have such an opportunity to save.
Without such a plan, many don’t save on their own.
Now, if a proposed state program is adopted, they might have a chance to start.
Gov. Andrew M. Cuomo has included a retirement savings program called Secure Choice in his 2018-19 budget. The program would be used by employers who don’t offer a 401(k) or similar savings plan. Employees would be able to contribute from their paychecks, probably to a Roth individual retirement account. A professional financial firm chosen by state officials would manage the investments.
In 2016, Mayor Bill de Blasio proposed a similar program, but was thwarted in part by federal regulations that prevented cities from setting up a savings plan. A state task force also began looking at the issue.
It took two years, but the state’s Secure Choice proposal addresses the clear need. It’s also palatable to the business community because it’s voluntary for employers, who would have no liability and make no matching contributions. An AARP survey found that of 200 small-business owners who don’t offer plans, nearly 75 percent would do so if the state facilitated an option. For them, the program could provide a competitive advantage to attract good workers. Employer participation is critical.
The governor’s proposal leaves open whether workers would opt in, or whether they would be enrolled automatically. Automatic enrollment, with a well-explained opt-out provision, is the best way.
State lawmakers should insist this program be included in the final budget. Help New Yorkers save now so they will be far more secure later.
