If you work hard, you can succeed. That’s the American Dream. But for many workers that dream is out of reach.
Check out these alarming figures from the National Institute on Retirement Security:
- The average American has $3,000 saved up for retirement
- People near retirement age have an average of $12,000 in the bank
- Half a million workers near retirement age in Washington state have saved less than $25,000 for retirement
Many small businesses owners would like to offer retirement investment options to their employees, but they don’t have the resources to establish retirement plans.
Last session, Rep. Larry Springer sponsored the STaRT (Save Toward a Retirement Today) bill, which passed the House but died in the Senate. STaRT would create a state-operated retirement system for private sector employees.
The Associated Press recently reported that West Virginia, Indiana, Illinois, Connecticut and Maine also considered similar legislation. Opponents say it’s too paternalistic for the state to set up a retirement plan. But the reality is, only about half of small businesses offer retirement plans because they are too costly to operate.
With STaRT, the cost to businesses would be minimal; and all workers could contribute, whether its $20 a month or $200. STaRT accounts would follow employees from job to job.
Proposals similar to STaRT recently passed in Connecticut and Minnesota. Both bills create feasibility studies to explore setting up a publicly-operated retirement system for private sector employees.