Red or blue, US workers love state-facilitated retirement savings

A recent national survey has revealed that a substantial majority of Americans are in favor of state-facilitated retirement savings programs, aimed at assisting workers without access to employer-sponsored retirement plans.

The survey, conducted by Greenwald Research for the National Institute on Retirement Security, indicates strong bipartisan support with 77 percent of participants, including 86 percent of Democrats, 74 percent of Republicans, and 71 percent of Independents, endorsing such state initiatives.

“It's so encouraging that nearly every state is examining options for expanding access to retirement plans for workers lacking plans at their job,” Dan Doonan, executive director of the National Institute on Retirement Security said in a statement.

Support for state-facilitated programs cuts across generations, with the strongest positive sentiment coming from Millennials (79 percent).

The research also points to a growing readiness among Americans to participate in these state-sponsored plans. Approximately 82 percent of respondents shared a willingness to engage with such programs, marking an increase from 75 percent in 2020.

Participants also rated various aspects of these programs favorably, especially the potential for higher returns compared to other secure investments and low fees, with approval ratings of 87 percent and 86 percent respectively.

The survey research comes as the US faces down a deepening retirement savings crisis, with about half of American households at risk of not maintaining their standard of living in retirement, according to studies by the Boston College Center for Retirement Research.

While workers point to employer-sponsored plans as their retirement savings vehicle of choice, there’s no requirement for businesses to provide retirement benefits. That’s a challenge for the 57 million private-sector workers who have no access to an employer-sponsored retirement plan, as counted by the Georgetown University Center for Retirement Initiatives.

Since 2012, nearly every state in the US, except Alabama, has introduced or passed legislation to create state-facilitated retirement savings programs, with auto-IRAs being the most popular model.

“It will be important to watch for additional innovations as more states establish these savings programs and existing programs grow,” Doonan said, pointing to multi-state compacts for launching and maintaining retirement savings programs. “It also will be interesting to see if the state programs spur growth in 401(k) plan offerings, especially given that SECURE 2.0 provisions will make it easier for small businesses to offer retirement plans,” he said.