The pandemic has prompted a number of people to retire earlier than they had expected. As of the end of September, 50.3% of adults over the age of 55 have removed themselves from the labor force to retire. 66.9% of those between the ages of 65 and 74 have bowed out. Tim Morstad, Texas AARP Associate Director, says Covid 19 has played an outsized role in that decision for many.
“Over half of the businesses in our state don’t offer a retirement savings plan,” Morstad tells KTRH News. “That really sets us down a long term path that’s really dangerous for Texas.”
For those working for large corporations there is often the availability for workers to invest in a 401(k) type savings plan, but it’s an option employees of small businesses don’t have. Morstad would like Texas to consider joining the 12 states that have adopted statewide programs and the dozens of others that are considering it.
“Some states have considered having a state-sponsored Employment Savings Plan, to help people who currently don’t have access to a plan with their employer. That’s one thing Texas should look at,” he advises. “People are 15 times more likely to save for retirement if they can do it through a payroll deduction in the workplace. But without that access, they don’t do it.”
Plans vary from state to state, but state-sponsored programs offer a means of assisting the 55-million Americans without access to an employer-sponsored plan. The idea is pending in Louisiana to our east and was adopted by New Mexico in February of this year to our west.
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