Statewide Retirement Savings Plan Heading to Colorado Legislature
Nearly half of private sector workers in Colorado, more than 750,000 people in their prime working years, do not have access to a retirement savings plan at work. The Colorado Secure Savings Plan, a measure expected to be introduced in the state legislature later this month, would allow all workers in the state to put a portion of their paychecks away for retirement.
Kelli Fritts, director of advocacy for AARP Colorado, says people are 15 times more likely to save for retirement through their jobs.
"It's a vehicle for people that are currently not able to save for retirement through their work to do so,” she explains. “You are more likely to save through a retirement plan at work than any other way."
Fritts says the plan would also follow workers if they change jobs, which is important for service industry employees, construction workers and other contractors.
Critics of the proposal say government shouldn't be in the retirement fund business, because the marketplace already offers savings products such as mutual funds and IRAs.
Fritts says this plan is aimed at people who, for varying reasons, don't sign up for a private fund. And she says once people have built up some savings, they might choose to move that money into commercial accounts that promise higher returns.
Fritts adds the plan would also benefit taxpayers, citing analysis from the University of Maine, because people with even modest savings are less likely to turn to state and federal safety net programs for help.
"For an additional $1,000 in retirement savings for every retiree, that would save $3.9 billion nationally," she points out.
Fritts notes many people who worked their entire lives and weren't able to save enough on their own end up relying solely on Social Security.
She says the average Social Security benefit, between $1,200 and $1,400 dollars a month, just isn't enough to get by, especially in a state like Colorado with rising housing and health care costs.