RALEIGH — Registered voters in North Carolina ages 25 to 64 do not feel financially prepared for retirement according to a new survey by AARP. AARP’s survey of 600 registered voters found that over half (56 %) feel that they are behind in their retirement savings.
According to AARP North Carolina President Catherine Sevier, “The survey responses are indicative of the fact that nearly half of North Carolina’s private sector workers do not have access to the easiest way to save for retirement, automatic payroll deductions.”
Over 1.7 million employees in the state do not work for companies that provide 401Ks or pension benefits. Workers with automatic payroll deductions for retirement savings are 15 times more likely to save according to the AARP Public Policy Institute.
Sevier said, “When it comes to adequate savings, it really depends on where you work and if your employer offers a retirement savings plan, not how much you earn.”
The AARP survey conducted in May, found nearly all (90%) of respondents ages 35 and older wish they had more money saved for retirement and almost half (44%) of younger voters do not think they will be able to save enough money for their retirement years.
North Carolina voters are not the only ones concerned about retirement savings. That is why many states are stepping in to create new ways for more small businesses to offer retirement savings options. Ten states including neighboring Virginia, South Carolina, and Georgia are all considering options to increase workers’ ability to save more for retirement years.
A big concern among North Carolina voters, is that if retirement savings rates remain inadequately low, the state will be strained to fund social safety net programs like Medicaid that help limited-income older adults. 79 percent of the respondents said they are concerned about the North Carolinians who have not saved enough for retirement having to rely on public assistance programs.
A 2017 study by the University of North Carolina Wilmington (UNCW) found that even a modest increase in savings will reduce Medicaid spending by $448 million a year by the year 2030. Another 2017 study by AARP’s Public Policy Institute found that if savings were increased by a mere $1,000, Medicaid would save $127 million a year by 2030.
Because workplace retirement savings plans are the easiest way to save, the NC House of Representatives unanimously passed (108-0) HB604, a study bill introduced by Representatives Jon Hardister (R), Bobby Hanig (R), and Stephen M. Ross (R), so North Carolina can find the best ways to make it easier for North Carolinians to save so they can live the lives they want in retirement.
Most voters agree (85%) that elected officials should support legislation that would make it easier for small businesses to offer workers a way to save for retirement, with three in five saying they strongly agree.
“That is why AARP is now urging the NC Senate to pass the study bill so the state can begin its research and to start developing a plan,” Sevier explained.