Registered voters in North Carolina ages 25 to 64 do not feel financially prepared for retirement according to a new survey by the American Association of Retired People. AARP’s survey of 600 registered voters found that over half (56 percent) feel that they are behind in their retirement savings.
Over 1.7 million employees in the state work for companies that do not provide 401(k)s or pension benefits. Workers with automatic payroll deductions for retirement savings are 15 times more likely to save, the AARP Public Policy Institute says.
AARP North Carolina President Catherine 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.”
Because workplace retirement savings plans are the easiest way to save, the N.C. 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 take control of their financial futures.
The AARP survey conducted in late May found nearly all (90 percent) of respondents ages 35 and older wish they had more money saved for retirement and almost half (44 percent) 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 businesses to access retirement savings options for their employees. Ten states including neighboring Virginia and South Carolina are 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. Seventy-nine 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 2016 study by the University of North Carolina Wilmington (UNCW) found that even a modest increase in savings will reduce Medicaid spending by $448 million 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, as well as food and housing assistance, would save $127 million by the year 2032.
Most voters agree (85 percent) 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 N.C. Senate to pass the study bill so the state can begin its research and start developing a plan,” Sevier explained.
Steven Hahn is with AARP North Carolina.