More than 900,000 Colorado workers soon will have access to a retirement savings plan through their workplace. Senate Bill 200 recently cleared the Colorado Legislature. Kelli Fritts, associate state director of advocacy for AARP Colorado, said the measure will help the state avoid what she called a retirement crisis.
In 2012, nearly 1 in 4 older Coloradans relied on Social Security for 90% of their income. The average benefit is $17,000 a year, but Fritts said older Coloradans spend $23,000 on food, utilities and health care alone.
"At this rate, 1 out of every 2 middle-class retirees will be unable to afford their basic needs in retirement," Fritts said. "This will cost taxpayers down the line if we don't take action."
Critics of previous retirement bills argued plans already were available in the marketplace. Fritts said this year's legislation came after a board appointed by the governor - which included small-business owners, investment planners and long-time advocates such as AARP - unanimously supported a private-public partnership modeled on successful efforts in Oregon.
The Colorado Secure Savings Program will be professionally managed, and Fritts said it won't put taxpayers at risk or come with any ongoing costs for employers. The program also will be voluntary for workers and portable - people can continue to save if they change jobs.
Fritts said workers are 15 times more likely to save for retirement when they have a workplace plan.
"Individuals may have access to open their own account, but only 5% of people will go out and open their own IRA, and that number has not changed in decades," she said.
Currently, women and people of color are much less likely to have access to workplace retirement plans, and households of color have disproportionately lower retirement savings than white households. Fritts said her group will continue to work with the administration to ensure the new program helps build a stronger, more secure retirement future for all Coloradans.