Retirement is a hot button issue to both those nearing the age when they’d like to stop working and younger workers preparing anxiously for the future. A recent analysis from MarketWatch contributor Paul Brandus lauds states that are beginning to enact retirement schemes to help those beyond what they’d be eligible to receive in Social Security funding. For most Americans, the amount they are eligible to receive from Social Security is far lower than what is actually necessary to sustain their everyday lives and finances.
Brandus reminds that statistics show “40 percent of middle-class Americans will live close to or in poverty by the time they reach 65.” Those stark numbers reflect that very few workers in their 50s have pensions – fewer than 10 percent – and most don’t participate in a retirement plan like an IRA or 401(k). A change is necessary in how workers are educated on the necessity of contributing to company or personal retirement accounts, such as putting gold into an IRA account or setting aside a specific percentage of paychecks towards 401(k) to achieve company matching levels.
In addition, states can do more to provide retirement investment opportunities to those who do not have access at work and cannot, for whatever reason, manage personal accounts. Landus shares that California and Illinois already automatically enroll employees without access to company-sponsored retirement vehicles in state accounts. Although those employees can opt out, they receive education on why it is smart not to do so.
States are smart to do this not only because it’s the right thing to do for their citizens to provide a brighter future for all and the possibility of retirement for many who believe they can never stop working, but also because rising levels of poverty are very expensive to state governments. Work that can be done to better citizen finances while staving off poverty is a win-win for the government.
States that are beginning to offer in retirement investment options to citizens are exposed to risk, however. These funds are expensive to launch and maintain and states have to develop sustainable models of paying for them in the future. Citizens can help by availing themselves of every available education opportunity to prepare for their own future retirement and investing every penny – or piece of gold – they possibly can to secure their own future. To do so secures the financial stability they’ve spent their work life building.
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