More and more of us work for smaller employers. That’s all to the good because economic growth comes from smaller companies while big companies become inefficient the larger they get.
At the same time, smaller employers generally don’t offer any form of retirement plan at work. So there is a dark side to working at a small business. It’s just a fact that people who have access to a retirement plan at work are much more likely to save for retirement, and people who don’t have access through work usually don’t.
This movement needs to go to all 50 states!
Now 3 states — California, Illinois and Oregon — have state-sponsored retirement plans, according to the Wall Street Journal. Fifteen other states have similar proposals on the table. What the states have set up is a thing where you automatically have payroll deduction into a state-sponsored (but not state-run) IRA program. The associated costs and fees are very low and you can build up money for the future.
Former President Bush proposed a plan like this many years ago and I got so excited about it. But the proposal never went anywhere in the U.S. Congress. So it’s left to the states to be a laboratory because of the failure of a dysfunctional Washington!
But think about this: If we don’t come up with efficient ways for people to save for the future, and they hit retirement and they’re infirm? Well, you know who’s going to end up paying: You and me!
That’s why these state-sponsored retirement plans for small businesses should become the law in all 50 states. Because entrepreneurs need to focus on their business, not picking a retirement plan for their workers.
Read more: New ways for you to invest your spare change