Colorado’s workforce is innovating, but the structures to support it aren’t — and taxpayers are about to pay the price of our state’s growing retirement crisis.
Almost half of private-sector workers in Colorado don’t have access to a retirement savings program at work. We all want to live out our golden years with peace, security and independence. But without better opportunities to save, those ideals will be out of reach for many.
Coloradans need a tool that will expand access to professionally managed and low-fee retirement plans. That’s why I’m sponsoring Senate Bill 173, to investigate different programs that could help today’s workers save.
This legislation would require a study and a thorough analysis of the options the state could adopt to ensure people are able to save for their futures. The options include keeping the status quo, a marketplace exchange, more financial education and the creation of the Colorado Secure Savings Plan.
Similar to a program rolled out in Oregon, the Colorado Secure Savings Plan would automatically enroll employees in a plan offered through a public-private partnership in coordination with the state, which deducts a certain percentage out of their wages to put toward retirement. This model is proven: Research shows people are 15 times more likely to save for retirement if they have a plan that makes automatic deductions from their paychecks. Employees would always have the option to raise or lower how much they save every month, or opt out entirely.
The Colorado Secure Savings Plan would be tied to the person, rather than their job, including contractors, self-employed Coloradans, or those with multiple jobs. They could take this plan from job to job without the hassle of having to roll one account into another.
Workers aren’t the only ones who win if the state makes it easier to save. It would mean Colorado’s small businesses could better compete for top talent, deepening their foothold in our state’s economy, instead of worrying about their ability to offer a 401(k) or IRA.
Even if you’re not a business owner or a worker in need of a retirement plan, more savings mean taxpayers like you save millions of dollars over the years. When people retire without sufficient savings, they’re often forced to rely on services like food stamps and Medicaid. In fact, economists in Utah estimated that if retirees had been able to increase their savings by 10 percent, or about $14,000 on average, taxpayers could have saved $194 million.
We all know that “having a job” looks different than it did just a generation ago. And the numbers tell us many of our friends don’t have enough savings to retire. The legislature is convened to solve big problems and the future of fiscal stability is one of them. Now is the time to look for solutions to plan for the future. Passing Senate Bill 173 sets us on that path to propose pro-business, pro-people solutions to help Coloradans thrive.
Democrat Kerry Donovan is a state senator and lives in Vail.