SALEM, Ore. (KOIN 6) — Too many Oregonians face the risk of living in poverty when they retire, according to findings of a report released Monday by the state’s retirement task force.
What researchers call a “national retirement crisis” is affecting too many Oregonians. What the group, led by State Treasurer Ted Wheeler, recommends, is a state-sponsored retirement plan that employees will be automatically enrolled in, with the choice to opt out.
“A successful retirement savings program needs to be automatic and easy to use,” said Midge Purcell, Urban League of Portland Director of Advocacy and Public Policy .
Data from a 2011 study by the Oregon State Treasury reveals roughly 45% of Oregonians do not have access to retirement savings plans sponsored by their employer. This puts many workers at risk of living in poverty when they retire, unable to cover basic expenses, or medical bills.
And, many people who do have access to savings plans don’t save enough.
More than half of Oregon workers have less than $25,000 in retirement savings, and more than a quarter have saved less than $1,000, the report found. This affects minorities, women, and part-time workers particularly, Purcell said.
“Women, people of color, part time workers and small business employees are the most likely to encounter barriers to retirement savings and any way we can simplify the process makes it easier for them to secure their future.”
Nuts and bolts
The proposed plan would be portable, allowing workers to take the plan with them from job to job.
Savings would be automatically deducted from employees’ paychecks, making the program easy for employers to implement. But, employers would not be required to make any contributions.
The next step, according to AARP Oregon executive council member Edward Brewington, is for the legislature to settle on details.
“This needs to get done in the 2015 legislative session – working Oregonians can’t wait any longer to save for their future,” he said.