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posted: 7/24/2014 5:01 AM

Educate, don't force workers to save for retirement

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In the July 14 Your Views section, state Sens. Daniel Bliss and Michael Frerichs tout the Secure Choice Savings Program as the answer for people who do not save for retirement. What they neglect to recognize or share with the readers is that payroll deduction retirement savings plans already exist. They are called IRA's (Individual Retirement Accounts). There are also Roth IRA's. Each of these types of accounts, set up by an individual, can accept 100 percent of wages up to a maximum contribution of $5,500 ($6,500 for people over age 50). They can be invested at the owner's discretion in a variety of investment choices such as stocks, bonds, mutual funds, ETF's and CD's. As such, an individual can create a portfolio consistent with his or her risk tolerance and retirement timetable.

Since these accounts already exist and are regulated by the federal and state governments, why do we need another option? If the logic for forcing retirement savings on an individual through their employer is so sound, why limit it to employers with over 25 employees? It's another example of government overreach that will require the state and small business employers to dedicate scarce financial resources to a duplicate program.

Perhaps a better solution would be to educate workers on the need for retirement planning and how to use existing programs to the benefit of themselves and their family. Perhaps courses on retirement planning should be a mandatory element in high school and college curricula so that graduates become informed savers and educate their parents or older family members. People who are forced to do something rarely see any benefit and will not utilize the programs as intended. People who make an informed decision on their own usually do.

Peter Gennuso


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