Navigating financial decisions can be confusing and stressful, especially when it comes to long-term saving. Setting a budget for the week, month or year is one thing; but for workers of all ages, it can be hard to feel a sense of urgency for a retirement fund that you won’t use for 20, 30 or 40 years.
I believe all Minnesota workers should have the opportunity to easily save for retirement and have those savings safely invested. That’s why I’m proud to be the chief author of a bill that would create the Secure Choice Retirement Program, a simple, safe and reliable retirement savings option for Minnesotans whose employers don’t offer a retirement plan.
According to Federal Reserve data, 45% of non-retired adults said they were not on track for saving for retirement, and 19% said they didn’t know how they felt about their retirement savings (2021 data). Secure Choice would allow workers to set the savings process on autopilot. Workers would be able to opt into the program and, just like other employer-provided retirement savings plans, have a fraction of every paycheck—as large or as small as you choose— set aside into a retirement account. When you don’t have to take an extra step of setting aside savings every month; when you know in the back of your mind that your money is gaining interest; you gain a sense of security that you’re planning for your future several decades down the line.
Secure Choice simplifies the process for employers, too. Setting up a 401(k) retirement program is a complicated process for businesses, particularly for entrepreneurs who already perform the many daily tasks of managing a business. The Secure Choice Retirement Program would minimize the amount of work necessary to help workers save for their future retirement and make Minnesotan job opportunities more appealing and competitive for their added benefits. The State Board of Investment, which stewards state employee benefit and retirement plans, would manage these retirement savings accounts with tailored investments based on the individual’s preferences and how close they are to retirement.
Research has shown that when workers have a way to save through payroll deductions, they’re better able to save for retirement and experience financial freedom when they leave their working years. Americans who don’t have access to a retirement savings plan through their workplaces are more likely to use Social Security as their only source of income after retiring. In
Minnesota, the average monthly Social Security benefit is $1,600. People who have worked their whole lives deserve more financial stability than that, and the Secure Choice program is one way to provide that.
Secure Choice isn’t just good for individual workers; as Paul Wellstone said, “We all do better when we all do better.” When more people save for retirement, it helps cut costs for everyone: Minnesota taxpayers could save an estimated $258 million over 10 years through reductions in state Medicaid spending, because more people would have a stable financial foundation to rely on after they leave the workforce.
The Secure Choice Retirement program is a simple way to help Minnesotas workers achieve the stability, dignity and financial freedom they deserve when they retire from the workforce to enjoy their golden years.