In September 2012, Governor Jerry Brown signed into law the
California Secure Choice Retirement Savings Program. For the 6.3 million
Californians without a pension plan or 401(k), the plan mandates automatic
payroll contributions into retirement accounts.
This could be good news for the almost 50% of California workers looking at a retirement near or in poverty, according to the University of California, Berkeley. In fact, many folks 50 to 64 years old aren’t looking at golden years filled with beaches and golf. Three quarters of them have annual incomes below $52,201 and an average retirement balance of $26,395. If you look at the median savings, more than half this group basically has no retirement savings at all, according to The New School.
The Fox News report asked experts what the new law could mean for future retirees. "There are pros and cons to the various approaches," UCLA Anderson’s Shlomo Benartzi said. "But I think the critical ingredient is to make it easier for people to save for retirement." Professor Benartzi is co-chair of the Behavioral Decision-Making Group and a leading authority on behavioral finance with a special interest in household finance and participant behavior in retirement savings plans.
"We eat too much. We drink too much. We don't save enough. I think the difference in the case of savings is that I think we can fix it. By making it easier to spend less and save more," he said.
Check out more about Professor Benartzi here and the Fox News piece here.
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