By Carol Ashley
Mark January 4, 2015, down as a date to remember—one of the greatest legislative wins for families and individuals facing and living in poverty became law in Illinois. Called Secure Choice, it takes what corporate America has known for years, that employees are more likely to save for retirement through a payroll deduction, and provides the same opportunity to millions of Illinois employees whose employers previously never offered such a vehicle. In turn, many more people will retire with economic dignity and not into poverty. Adding to the meager average of $15,228 a year that workers relying on social security alone would each receive, Secure Choice boosts workers’ own savings potential via a payroll deduction that, in turn, immeasurably increases their overall retirement financial health.
This is a victory for all Illinoisans. First, millions previously without access to such accounts now can utilize a payroll deduction to save for retirement. Second, on the cost front, most of the costs of administering the accounts will be funded by the pooled assets of the participants, and all Illinoisans will benefit when more of its citizens are able to fund their own retirements.
Importantly, low-wage workers and persons of colors, who disproportionately have been without access to payroll deduction style retirement savings plans, will now have access to a retirement savings option at their jobs. These groups, who have been traditionally left out on the sidelines, or worse, targeted for predatory banking products, now will have a safe asset building tool that works, which will ultimately increase their wealth over time and help them break the cycle of poverty.