AARP’s mission is to empower people to choose how they live as they age. The more money you have for retirement, the more choices you have as you age. This year AARP Alaska is focusing on helping people young and old prepare to be financially fit in retirement. We want people to think about retirement, learn about Social Security, and keep the money they have saved away from scammers. In April, AARP Alaska is hosting a four-part webinar series: saving for retirement, protecting yourself from scams, retiring as a state employee and information for caregivers on power of attorneys, wills and trusts. For more information go to http://www.aarp.org/ak.
This month, we are highlighting how we can help employees of small businesses save for retirement. Nearly half of Alaska's private sector businesses don’t have the ability to offer retirement savings plans to their employees. That means that their roughly 105,00 Alaska workers don’t have access to a workplace retirement savings plan, leaving them unprepared for the future and at risk for reliance on state-funded public assistance programs. We know that without access to a workplace retirement savings plan, nearly everyone fails to save; only 5% of people independently set up a plan to save. People are 15 times more likely to save for retirement if they have access to a way to do so at work, and 20 times more likely if they are automatically enrolled into that workplace savings option.
In Alaska, we treasure the pioneering, entrepreneurial spirit of our state. Nowhere is that spirit better illustrated than the thousands of small businesses that provide a livelihood for many Alaska families. But as these business owners and their employees work hard to support their families and their communities, who is looking out for their financial future? For hard-working Alaska small businesses who power the engine of our economy?
A new survey from AARP shows that most Alaska small business owners think more should be done to encourage Alaska employees to save for retirement. In fact, seven in ten Alaska small business owners support a privately managed, ready-to-go retirement savings option that would help small businesses offer employees a way to save for retirement. Most small business owners agree that state lawmakers should support a bill to make it easier for small businesses to offer a retirement savings option for their employees.
The Alaska legislature can change the landscape on retirement readiness in our state by passing Alaska Work and Save legislation (SB 135). Alaska Work and Save will provide an easy, low-cost retirement savings option to help small businesses give employees a way to save and take control of their future. It allows employers access to a simple, plug-and-play retirement option for employees with little effort and no cost or risk.
Employees are the lifeblood of any business. With Alaska Work and Save, employees can save for retirement right out of their regular paycheck and take control of their financial future. They set up their account, always remain in control of it, and retain it if they change jobs. This gives small business owners an edge in hiring and keeping high-performing employees and remaining competitive with larger companies and the employee benefits they can offer.
Retirement readiness is a critical issue for Alaska and Alaskans. It will reduce reliance on state-funded programs and provide the financial foundation for all Alaskans to choose how they live as they age. Small business owners across the political spectrum see and understand the challenges of saving for retirement and support a public-private savings option.
How can you help? Ask your legislator to pass Senate Bill 135, which establishes a Work and Save option for employees of small businesses to save for retirement. You can also join AARP Alaska in advocating for issues important to seniors and the 77,000 AARP members in Alaska at http://www.aarp.org/getinvolved. For information about the AARP small business survey data, visit http://www.aarp.org/akworkandsave.
Teresa Holt is the AARP Alaska State Director.
