Older New Yorkers Want to Help Millennials Save for Retirement
Members of a leading senior citizens lobby group are advocating for a retirement plan in New York that could benefit their children and grandchildren.
The proposal by AARP could help address a big change in employer practices since the group’s members, 50 and older, began their working lives. And that is the sharp decline in companies that offer pensions, or even 401k retirement accounts, leaving younger workers with no opportunities at work to save for their retirement.
The group’s New York director, Beth Finkel, speaking at a news conference in a busy State Capitol corridor, says it’s a growing concern with over half of the workforce now lacking access to retirement plans.
“There are 3.5 million New Yorkers who work in private industry and go to work every day,” said Finkel. “And don’t have an opportunity to save in the workplace for their own retirement.”
AARP is backing a bill that allows workers with no access to retirement plans to decide to have a portion of their paychecks go to a portable, state-sponsored Roth IRA. They would be able to take the Roth IRA with them to a new job, and keep contributing as much or as little as they want. Finkel says it won’t cost businesses any money, but they would be required to alter their payroll forms to accommodate the IRA contributions.
“This is not about government having to put in any matching money,” Finkel said. “This is a mechanism to allow people to save for themselves.”
Smitha Varghese, a junior at Queens College, has not yet even entered the working world but is already thinking about her retirement. She says she experienced first hand what happens when you’re older when you don’t make provisions.
“My mother had a pension. My father didn’t. He didn’t have a 401k,” Varghese said.
Her mother got cancer, and passed away, leaving her father to raise her and three siblings.
“He struggles a lot,” she said.
Her father is now 67, still working, and will be for foreseeable future.
Varghese started thinking about how the lack of a pension or 401 k could play out in her older years. She joined an effort by the New York Public Interest Research Group to get state government to help facilitate an alternative.
“Millennials, we hop to different jobs,” Varghese said. “There’s a change going on and legislation should support this change.”
The measure has majority party sponsors in each house, who hope it can be approved as part of the state budget.
But the state’s Business Council opposes the measure, saying they already have enough paperwork to deal with right now implementing the state’s new paid family leave program, which also requires a pay roll mechanism for employee contributions.
And the Business Council says Governor Cuomo has already announced plans for a commission to study options for government-sponsored alternative retirement plans, called NY SMART, and they’d like to see those results first.