L.D. 1622 would help many working Mainers who don’t have a retirement savings program through their employer save for their retirement.
The average annual cost of utilities and food for a 65-plus family is $24,000. The average annual Social Security benefit for the same family is $20,000 — not enough! For many retirees, financial disaster is one serious illness away. It’s estimated 207,000 Mainers don’t have access to a retirement savings program through their employers. Only 5% of workers save for retirement on their own without a workplace plan. However, when offered a retirement savings plan, 72% of employees take advantage of it.
With this program, thousands of working Mainers will have access to a retirement savings plan through their employer. The saver controls their plan and future, including the amount deducted from their paycheck, and the plan moves from job to job with the worker. Workers of any age can start saving, and the sooner a person begins, the more time their money has to grow into a comfortable cushion for retirement. If someone doesn’t want to participate, they can opt out. People prepared for retirement with private savings are less likely to need public assistance later in life, and that saves money for everyone.
Oregon (OregonSaves, 2017) was the first state to have such a program, and it’s doing very well. The average income of an employee participating in their program is $29,000, demonstrating that people with low incomes understand the need to save for retirement. Twelve states now offer a similar program.
L.D. 1622 is a wonderful opportunity to give more Mainers retirement security. It has the support of AARP Maine, and I hope our legislators will support it too.
Pamela Partridge
North Anson
AARP Maine volunteer
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