State-Facilitated Retirement Savings Plan Could be included in NYS Budget
Chances are many Central New Yorkers who work for a smaller business don’t have an employer-provided retirement savings plan. That could change if a state-facilitated, payroll deduction plan called “Secure Choice” is approved in the state budget.
The AARP is pushing state lawmakers to include it in their spending plans. The group’s state legislative representative Bill Ferris acknowledges workers do have the option of setting up their own IRA outside of work. But most don’t bother.
"A person is 15 times more likely to save for retirement if there's a way to save for retirement at the workplace. That's the key to the bill," said Ferris. "If an employer doesn't offer a way to save, the state-facilitated helps that employer help the employee set up an individual IRA so they can start saving for their retirement."
Ferris says providing that “vehicle” for savings through payroll can make a difference for the one-half of New Yorkers who don’t have access to an employer-based savings plan.
He says social security just isn’t enough at $14,000 a year. Ginger Lynch-Landy is director and lobbyist for the New York chapter of the Assisted Living Federation of America. She says they see gaps in savings and planning with younger employees who will likely want choices as they age.
"People want to choose whether they want to live at home, how long they live at home, and then at some point, they may need to make a shift into a type of congregate care like assisted living," said Lynch-Landy. "They may also at some point need a nursing home."
She says most people find they need to make that shift in their mid-80’s. She’s concerned that the system could be strained if baby boomers and their children don’t have much to fall back on.
"So we have some time before the boom hits. And when it does, we're going to have such a demand on services. We're going to be in a crisis," said Lynch-Landy. "We need to build resources, encourage investment, so that those people may have choices, and not hit the Medicaid system prematurely, or at least delay their entry into the Medicaid system."
Both Lynch-Landy and Ferris say they’re not aware of any opposition to the savings plan, which might cost employers about $260 a year or less to administer. State lawmakers are expected to vote on a budget by the April 1st deadline.