There used to be an unwritten promise in the American workplace: If you worked hard, you could count on a secure retirement at the end of your career. Individuals relied on a three-legged stool built from Social Security, pensions, and personal savings to help them live comfortably after a lifetime of work. The Great Recession, housing crisis, and the almost total disappearance of defined benefit pension plans in the private sector have left workers unprepared for retirement.
If you have access to a retirement plan you are 15 times more likely to save for retirement. Yet over half of New Jersey private sector workers do not have access to a workplace retirement plan. And your access to a workplace retirement plan varies greatly based on who you are and where you work. Women, people of color, and employees of small businesses are more likely to be left out of a secure retirement. Among full-time employees, less than half of American-American, Latino and low-income workers have access to an employer provided retirement plans. Social Security and Medicare form a critical source of income in our retirement years, but we all know that this cannot be the only savings plan for retirees. On average, retired New Jersey residents only receive about $1377 a month from Social Security, and for about a quarter of recipients, Social Security is their only income. We all know that is not enough.
Now is the time for New Jersey to lead the way out of this looming retirement security crisis. Let’s take a step forward to help level the playing field by offering all of New Jersey’s workers an easy way to save for retirement. With all of the other financial pressures facing working New Jerseyans, we need a simple structure that takes the guesswork out of saving for retirement. The creation of an automatic, portable, and secure way for New Jerseyans to save the money they earn will help keep seniors from living in poverty. Secure Choice would provide NJ workers access to individualized savings tools, secure investments, and financial education and guidance.
Giving every working New Jerseyan an easy way to save for retirement can provide security for all New Jerseyans – this is the right move for New Jersey’s workers, small business owners and communities. That’s why New Jersey Citizen Action supports A4275, the New Jersey Secure Choice Savings Program Act which will help make retirement more secure for millions of New Jerseyans.