It has been my life’s work to help people gain understanding and control of their economic future, including personal finances. Whether that means pursuing higher education, starting a business, buying a home, or planning for retirement, savings is key. While once it was common to work for the same employer for much of your career and retire with a pension, our economy has changed drastically over the years. It’s true many workers are lucky enough to be offered a retirement savings plan through their employment, but 46% of private-sector workers in Maine don’t have access to that benefit. That’s nearly 235,000 workers who have no easy way of saving for retirement and planning for their golden years.
That’s why I’ve sponsored LD 1622, the Work and Save bill, to help more hardworking Mainers save for the retirement they deserve. This bill will make saving for retirement easy and automatic for more hardworking Mainers. According to a survey conducted by AARP, 66% of working Mainers say they’re anxious about having enough money for retirement. But figuring out how to set up and invest an IRA account on your own is complicated, confusing and time-consuming. Most people simply don’t have the energy or spare time to figure out all the steps. Under the Work and Save bill, workers who choose to participate in a state-sponsored program would have a certain amount of their paycheck set aside into a Roth IRA account, the same way other workers contribute to employer-run retirement accounts. What’s more, this account would stay with them from job to job, and workers can adjust how much they’re saving to fit what makes the most sense for them.
I’ve heard from many small-business owners who say they would love to offer a retirement plan to their workers, but they simply don’t have the money to do so. Under this bill, employers do not contribute any matching funds to their workers’ saving accounts; they simply facilitate saving through their existing payroll services. This means employers have an extra benefit they can use to attract qualified workers, without straining their bottom line.
According to a report from the Margaret Chase Smith Policy Center, the less people have saved for retirement, the more likely they are to need help from public assistance programs. If every Mainer between ages 65 to 79 had an extra $1,000 of income per year, it would save taxpayers up to $15.6 million per year, as these retirees would need to rely less on taxpayer-funded programs. By helping people plan and save for their own retirement, we help them remain financially independent, while lowering the burden on our social safety nets.
I’m proud to share with you that this bill has gained strong bipartisan support. Regardless of which way your politics lean, how old you are, or what you do for work, it’s clear that making it easy to save for retirement — in a way that works for you and your family — is just good sense. LD 1622 is still wending its way through the legislative process. It was recently voted out of committee with nearly unanimous support, and now awaits votes in the full Legislature.
If you have any questions about this bill, or other issues related to the state Legislature, please don’t hesitate to contact me. I can be reached by email at [email protected] or at my office at (207) 287-1515.
Eloise Vitelli is a state senator representing District 23, consisting of Arrowsic, Bath, Bowdoin, Bowdoinham, Dresden, Georgetown, Phippsburg, Richmond, Topsham, West Bath, Woolwich and the unorganized township of Perkins.