“The ‘Golden Years’ aren’t so golden.’’
That sentiment sums it up for far too many retirees these days as many people are outliving their savings with only Social Security checks providing income.
A bill signed into law by Gov. Murphy this week aims to help.
The New Jersey Secure Choice Savings Act intends to promote retirement savings by automatically enrolling some private-sector workers in an IRA that will be managed by a board of state officials and members appointed by the governor with the Senate’s consent.
Employers with more than 25 workers who don’t already offer a retirement savings plan will be required to establish an automatic payroll deduction for their employees, who will be enrolled at 3 percent unless they opt out or choose a different contribution level. Smaller employers can offer the payroll deduction but are not required to under the law.
It’s a bold, but needed, step.
Evelyn Liebman, director of advocacy for AARP New Jersey, calls the current situation for retirees a “crisis,’’ citing statistics that show the average near-retirement worker has a meager $14,500 set aside.
“This crisis disproportionately impacts woman and minority workers who are less likely to have access to a retirement savings option at work," she has said, according to NJ Advance Media.
While some in the business community have grumbled that this is yet-another burden for employers, we agree with those who see it as a lifeline for those not fortunate enough to still have pensions in their workplaces.
The program won’t be up and running for a couple of years, though, so it is still wise advice for those nearing retirement to start taking a hard look at their finances and for those just beginning their work journeys to start setting aside a little each pay cycle for those golden days ahead.