With nearly a third of Americans nearing retirement and not having any money saved, Pennsylvania’s treasurer is urging lawmakers to pass legislation to establish an auto-IRA program.
Pennsylvania has the fifth largest population over age 65 in the country. Without a change, Treasurer Joe Torsella warns that taxpayers may carry some of the burden.
“It’s going to cost us $15 billion in additional state assistance costs, from the fact that too many of us have not saved,” said Torsella.
A recent Retirement Security Task Force report found that more than two million Pennsylvanians have no access to a retirement savings program through their work.
The auto-IRA program, which would be facilitated by the state, would allow employers to opt in. At that point, all employees would be automatically enrolled. Employees would have the option to then opt out.
“That then follows that employee around from job to job through the rest of their life,” said Torsella. “It fundamentally is a way to simply make it easy for people to save their own money.”
Torsella said that without access to a retirement savings program through work, only one in 20 employees will open an account on their own.
“It’s human nature. If you don’t have an easy set it and forget it way of saving, you probably won’t,” said Torsella. “We can set two million people on the road to the retirement they deserve and, by the way, make budget time easier here in the Commonwealth.”
Lawmakers expect bills to establish the auto-IRA program to be introduced in the next few weeks.