EDITORIAL: ‘Save for tomorrow!’ Keeping Illinois retirees away from the cat dish
Keeping tomorrow's retirees out of possible poverty is, therefore, a serious concern and arising public policy priority. This week
Yes, we too wondered at first about trusting the financially ham-handed state of
Do you work at a family-owned restaurant? Fix cars at a local mechanics shop? Serve a small not-for-profit? Many businesses in those sectors can't afford to offer the 401(k)-style plans that many of us enjoy -- and they certainly can't afford to offer pensions.
So a nudge from government that does not put taxpayers at risk makes sense. Workers start out setting aside 5 percent of each paycheck. They choose a Roth individual retirement account and can manage the money themselves. Employers don't match contributions from employees. Instead they merely set up the deduction process, and the state has made it pretty easy. Once set up, the process is automated and mindless. The state contracts with the money manager who accepts each worker's contribution, and has safeguards in place to monitor investment returns, account costs and portfolios.
To the extent this is a nanny-state program that imposes duties on small employers, the inconvenience is minuscule compared to the good that Secure Choice will perform for workers who otherwise wouldn't save.
No investment comes without risk. These workers will face the same ups and downs as anyone whose retirement depends on investment returns. But it's their money, not taxpayers', and workers can opt out if they don't want to participate.
We hope they won't. Studies have shown that if employers don't offer a retirement program, workers put off saving. By contrast, when workers do have access to a program, many will participate. As the money automatically comes out of their paychecks, they adjust.
And they build nest eggs. Which sound more appetizing than Meow Mix.
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