Retirement savings — at $25.3 trillion as of yearend 2016 — are at the highest level ever recorded.
But the retirement crisis continues, according to a recent World Economic Forum report. In fact, the worldwide retirement savings gap in 2015 is estimated to be $70 trillion, with the largest shortfall being in the U.S., according to the report. What’s even more worrisome is that the savings gap is growing at a rate of $3 trillion per year — just in the U.S. alone.
Part of the problem in the U.S., say some experts, has to do with coverage: The percentage of people who have an employer-sponsored retirement plan. In fact, some 55 million to 63 million workers — about 50% of the workforce — don’t have a retirement plan in the workplace, according to various estimates.
And having one — an employer-sponsored retirement plan such as a 401(k) plan — is key to saving for retirement. For one, studies have shown that employees are 15 times more likely to save if they have access to a payroll deduction savings plan at work, according to AARP. Plus, having a retirement account is key to being able to fund one’s lifestyle in retirement.
So, given the absence of and the need for such plans, the Department of Labor issued guidelines in 2016 that paved the way for states to set up retirement plans for workers without running afoul of federal pension laws.
At present, seven states have approved programs, including Illinois, Washington State, Oregon, New Jersey, Connecticut, Maryland and California. And 30 states — including Utah, New York and Arkansas — and numerous cities, including New York, Seattle, and Philadelphia, are considering these programs, according to AARP.
But alas, the Trump administration is not so fond of these programs. In fact, President Donald Trump signed in May a resolution…