Increasing Retirement Security for Washingtonians
For years the nation has been facing a looming baby boomer retirement crisis, but many boomers are working well past retirement age. This trend raises new concerns about the retirement security of Washingtonians. Eligible workers are delaying retirement for many reasons including: lack of retirement savings, early cash-outs of retirement savings, lack of assets, student loan debt, the cost of health and long-term care, effects of family member substance use disorder, and other retirement security risk factors.
Retirement readiness involves many strategies that are often best implemented early. Making sure every resident has the financial education necessary to make sound financial decisions is an important first step towards helping Washingtonians adopt positive behaviors and save the right amount to ensure their retirement plan is on track.
Access to retirement savings plans - Over 2 million (61 percent) working Washingtonians don’t have access to a retirement plan at work, and over 131,000 businesses (74 percent) do not offer retirement savings plans to their employees primarily due to cost and complexity. The vast majority of these businesses had fewer than 100 employees.
Investing in retirement savings - 83 percent of workers age 55-64 have nothing or very little saved in the two main types of retirement plans (defined benefit or defined contribution). Additionally, 56 percent of Washingtonians are not able to save any money, retirement or otherwise.
Asset ownership - Among Washingtonians of retirement age, 50 percent own their homes outright, 22 percent are renters, and 28 percent are mortgage holders.
Financial Education - Research has shown that financial education positively impacts financial planning and saving. Not understanding basic financial concepts is linked to a lack of planning and wealth accumulation.
Federal programs - Social Security and Medicare – both important components of retirement security – face long-term financing shortfalls. Social Security’s total costs are expected to exceed total income in 2018 for the first time since 1982.
To enable more employees and employers to access retirement plans, the state created the Retirement Marketplace.
The Department of Financial Institutions offers online financial literacy information and resources, including guidance on saving for retirement, as well as free financial education classes.
The State Treasurer also provides financial education and retirement planning resources.
The Office of the Superintendent of Public Instruction has developed Financial Education K-12 Learning Standards to help increase the financial literacy of young people, and Jump$tart Washington, a nonprofit coalition, was created to promote the need for financial education in Washington State.
Created by the Washington state legislature, the Financial Education Public-Private Partnership brings together public and private stakeholders to improve and advocate for financial education in Washington schools and communities by providing teacher trainings and quality resources.
Financial Education Public-Private Partnership brings together public and private sector and provides valuable information for financial education.