Advertisement
retirement

States Step in to Boost 401(k) Savings

Some states are providing a savings option for workers without an employer-sponsored plan.

Tobias Read is the state treasurer of Oregon.

Oregon is one of six states that require employers that don’t have a 401(k) or other retirement savings plan to offer a state-sponsored plan to their workers. How successful has OregonSaves been in encouraging more people to save for retirement? Our goal was to remove as many barriers and sources of intimidation as possible. And from that standpoint we feel we’re doing really well. As of mid June, we had close to 86,000 enrolled accounts. In a little less than two years, more than $20 million has been accumulated by these folks, and what’s especially impressive is that most of them had never saved before.

Advertisement - Article continues below

Several other states are con­sidering offering state-sponsored retirement plans. What advice do you have for them? We learned to work closely with business groups and advocates, and we’ve made it easier for employers by integrating our system with some of the biggest payroll providers, such as Paychex. We all want to make it as easy as possible for both employers and savers.

In recent testimony before the U.S. Senate Finance Committee, you suggested that another way to improve the retirement savings rate was to allow individuals as young as 16 to invest in an IRA. Why do you think this is a good idea? It’s very simple: compound interest. We should not, in my view, put up any barriers to someone getting started as soon as they’re working. I can recall working at a bike shop when I was in high school, and if I had been auto-enrolled at that time, it would have been a good thing. If young people are going to join the workforce, they shouldn’t be denied the opportunity to save. I was fortunate to get into the savings habit early with my first job out of college, but it sure would’ve been even better to have started at 16.

But how do you convince a 16-year-old to save for retirement instead of spending the money? Information and access are the keys. We have to develop financial tools that meet the needs and realities of those who are looking for advice. Financial technology tools and social media offer a number of opportunities that are just being grasped. I reject the notion that “the younger generation” isn’t financially savvy. They face a number of headwinds, including rising student debt.

Advertisement
Advertisement

Most Popular

Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy in trouble, tax policy takes on added importance in the 2020 presidential election. So, let's take a look at what Joe Biden has said …
September 18, 2020
Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check
Coronavirus and Your Money

Social Security Recipients, Veterans Must Act Now to Get Extra $500 Stimulus Check

The deadline for seniors and veterans to request an additional $500 stimulus check for a dependent child is approaching fast. See how you can claim yo…
September 25, 2020
3 Reasons to Wait Until 70 to Claim Social Security Benefits
social security

3 Reasons to Wait Until 70 to Claim Social Security Benefits

In a rush to file for Social Security benefits at age 62? Many people are, but slow down and do the math first.
September 29, 2020

Recommended

The Best Vanguard Funds for 401(k) Retirement Savers
mutual funds

The Best Vanguard Funds for 401(k) Retirement Savers

Vanguard funds account for a third of the 100 most popular 401(k) retirement products. We rank Vanguard's best actively managed funds, including its t…
September 29, 2020
Should You Retire During a Pandemic? 3 Things You Should Know
retirement planning

Should You Retire During a Pandemic? 3 Things You Should Know

You may have no choice but to retire early, so make these three crucial assessments now to see where you stand.
September 28, 2020
HSA Limits and Minimums
health savings accounts

HSA Limits and Minimums

Annually adjusted contribution limits and other requirements must be met if you're covering health care costs with a Health Savings Account.
September 21, 2020
Don’t Be Paralyzed by Uncertainty
retirement planning

Don’t Be Paralyzed by Uncertainty

You definitely need a plan, because what’s ahead could be scarier than what’s behind us.
September 21, 2020