Secure Choice Means a More Secure Retirement for Women

The debate continues to rage on the issue of pensions which is very important, but not enough is being said about the broader issue of our retirement savings crisis and the economic security of women in particular.

According to the Retirement Savings Education Campaign by the US Department of Labor, women retire with two-thirds the savings of men, because they are more likely to work in part-time jobs that do not qualify them for a retirement plan. It is a systemic, perennial problem that women are financially marginalized for the same reasons that the society expects them to fulfill without questioning, especially in the role of caregiving for their younger ones and elderly loved ones, along with managing other household chores.

Women struggle to balance work with all the other responsibilities which in turn contribute to their wage disparity -- missing promotions, switching jobs due to cutting back on hours throughout their work life to care for their families. The result is a significant impact on their retirement savings, facing poverty in older years.

Most people would agree living long is a wonderful thing, but being a woman I was able to realize more clearly when both my maternal and paternal grandmothers outlived their husbands and the challenges of old age they had to face with their increasing incidences of physical and mental disabilities. The only source of their income was their husband’s limited pension, as they both never really had the time to work outside due to childrearing responsibilities. Luckily their children supported them throughout their old age, but what about the percentage of older women who never married and are living alone. Even if we forget about women in old age group, I am not that old yet but what if I am a young widowed mother, with limited earnings I would have to take care of my young one until he goes to college and then worry about my old age expenses. According to the Institute for Women’s Policy Research, overall poverty rates for unmarried and widowed women are two to four times greater than the rates among married women. So what is the answer to such mishaps in a woman’s life?

We need to emphasize that poverty increases for women with age more than for men. Women live longer. They have more challenges. And older age leads to higher incidence of disability, leading to higher medical costs than men face. These differences in women’s earnings and retirement savings are leading to a crisis. Governor Christie and legislators must do the right thing. This is a moral imperative. Help women help themselves to save earlier in life and save more so that they can live in retirement without suffering undue poverty.

To improve the financial status of women, over 20 states in US are considering legislation to establish retirement savings plans. New Jersey should lead the way. Secure Choice is the solution. AARP is advocating for retirement savings tools like the Secure Choice Savings Act by Assembly Speaker Vincent Prieto, Senate President Stephen Sweeney and a group of forward-thinking bipartisan legislators.

Secure Choice is a commonsense solution to help New Jerseyans achieve the retirement security they need. The bill works much like a 529 college savings plan, which allows workers to easily save for retirement via a payroll deduction. Only employees can not contribute to their accounts, so neither taxpayer nor employers fund the program. Secure Choice doesn’t burden government or business. Employers are responsible only for setting up the payroll deduction so that employees’ contributions to their Secure Choice savings accounts are completed each pay period.

Secure Choice is simple. Under Secure Choice, workers without access to an employer sponsored retirement plan are automatically enrolled in the program with a 3% deduction from each paycheck. Assets in individual accounts are pooled and professionally managed. Accounts are portable, so workers continue to accrue benefits as they move from job to job. The Secure Choice plan makes it easier for businesses to offer a retirement savings account to their employees, helping them take charge of their financial future and improving the economic landscape for all New Jerseyans and it will give women in particular, a better long-term future.