📋 'Work-Save' Programs 1 Million Accounts (AARP Article/Advocacy)

[Winter2025VA]

FROM ARTICLE:

AARP has championed state efforts to help those without access to workplace retirement plans build savings.

By Kenneth Terrell, AARP. Published April 22, 2025.

LaVante’ Dorsey knew that before her business could focus on helping young women, she first needed to take care of her employees.

Since it opened in Newark, Delaware, in 2018, LaVante’ N. Dorsey & Associates has provided mental health and therapeutic counseling services to help women — and men, too — feel empowered and reach personal goals. But it couldn’t provide a retirement benefit to the seven therapists on staff. Like many small businesses, it didn’t have the resources.

USE LINK BELOW TO READ THE ARTICLE: https://www.aarp.org/politics-society/advocacy/info-2025/auto-ira-one-million-savers.html

[GailL1]

Is this type of retirement savings successful because the route to the savings is easier than doing the set up and contributions on ones’ own?  

Per the AARP study, it is - I’m not sure if that is an all around good thing.  When one has to do it on one’s own, there is a certain amount of learning that has to transpire - so I just wonder if there are teaching programs that also work with this Auto-IRA state based program.  

[Tonster521]

@GailL1For small employers, the State Work/Save programs provide a solution that may be cost efficient for both employer and employee. Sponsoring a 401 K Plan, SIMPLE IRA, etc. also include administrative issues as well as compliance regulations. The convenience of payroll deductions eliminates the extra effort that many will not do to establish an IRA on their own. I suspect that many of these State Work/Save programs offer automatic contributions to Life Path type funds in very small amounts. For example, a worker earns $500 per week and saves 1% or $5.00 per week will be acceptable due to the economies of scale. Such person may that the economies of scale in a State Work/Save programs except small contributions. On the other hand, that person may find minimum contribution requirements for mutual funds/ETFs, etc. if they set up their own IRA.