Within the next 20 years, the number of Californians beyond retirement age will increase by two-thirds, to 12 million. Many of them — half, by some estimates — will have saved less than they need to subsist on after they stop working, leaving them no choice but to either work until the end of their lives if they can, or live out the rest of their years in or near poverty.
Some of those seniors of tomorrow, no doubt, were during their working lives too short-sighted to invest in their employers’ 401(k) plans, or to open Individual Retirement Accounts (IRAs) on their own. Or they might have been struggling to support families, pay back student loans or were so chronically underemployed that saving money for retirement was out of the question.
In 2012, state legislators recognized this looming problem of the future elderly poor and wrote the California Secure Choice Retirement Savings Trust Act,
More than seven million people—over one-fifth of California’s population—work without a path to retirement. They have neither a 401(k) — the so-called “roller-coaster plan” tied to the stock market — nor a traditional pension that was once considered a worker’s right and which is now a rare species outside of government employment or the public education system.
There is nothing that legally compels a typical American employer to offer any kind of retirement plan to employees. But the average Social Security recipient earns about $15,600 per year in retirement benefits — a near-poverty income in the 21st century.
That could change for Californians when state Senate President Pro Tem Kevin de Leon’s “California Secure Choice’’ retirement savings plan takes effect. Meanwhile, as one union official put it, “Many employers’ retirement plan for their workers is that they work until they die.” Or,