Rhode Island Introduces Bill for State-Sponsored Auto-IRA Program to Address Retirement Savings Gap
Are you worried about your retirement savings? Do you feel like you’re falling behind in preparing for your future? If so, you’re not alone. Many Americans, especially those in the private sector, struggle to access employer-sponsored retirement plans, leaving them vulnerable to financial insecurity in their golden years.
But there’s hope on the horizon. A new bill introduced by Rhode Island legislators aims to address this retirement savings gap by establishing a state-sponsored auto-IRA program. Senate Bill No. 2045 proposes a model for creating a retirement savings program that would provide an option for employees who currently lack access to employer-sponsored plans.
The proposed Rhode Island Retirement Savings Program is designed to mimic the structure of the “Secure Choice” savings programs already implemented or under consideration in 16 states. This initiative aims to help the 172,000 workers in Rhode Island’s private sector who do not have access to retirement savings through their jobs.
The potential long-term consequences of this issue are staggering. Without adequate retirement savings, vulnerable older households in the state could face an average income shortfall of $9,090 per year by 2040. Additionally, the ratio of older households to working-age households in Rhode Island is projected to increase by 37 percent from 2021 to 2040, adding to the financial burden on state taxpayers.
The American Retirement Association (ARA) has voiced its support for the bill, emphasizing the importance of closing the retirement plan coverage gap to achieve equality and fairness in retirement savings opportunities. Data shows that when moderate income workers are automatically enrolled in a workplace retirement plan, there is no racial disparity in retirement savings participation.
By expanding retirement plan coverage and providing access to state-sponsored auto-IRAs, Rhode Island is taking a step in the right direction towards ensuring a secure and comfortable retirement for all its residents. It’s time to prioritize your future and take advantage of the opportunities available to secure your financial well-being in retirement.
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