Saving for Your Future

LIVING YOUR BEST LIFE (AFTER 50)

Setting aside money in one of the most expensive places to live in the country can be a daunting task. AARP Hawai‘i is the driving force behind a program that could help you and your children on the path to financial security.

LIVING YOUR BEST LIFE (AFTER 50)

RETIREMENT. For too many seniors in Hawai‘i, it feels like an unattainable dream. Even if you are fortunate enough to work for a larger company or government with 401(k)s or pensions, achieving financial security can be challenging. And without those options, substantial personal savings must still supplement Social Security income.

Economic upheaval during the pandemic, with job cutbacks and layoffs, has made it even more apparent how vital it is for Hawai‘i residents to have savings to fall back on. “Savings are especially critical for people when they retire and live on a fixed income,” says Audrey Suga-Nakagawa, advocacy director of AARP Hawai‘i. “While Social Security is an important piece of a retiree’s financial resources, Social Security alone is not enough to live on.”

Studies show that unless people are saving through their workplace, it’s not likely that they will save on their own for retirement. In fact, only 1 in 20 people will take the steps to open individual retirement accounts.

For many small businesses in Hawai‘i, offering a payroll savings plan is costly, and many simply can’t afford it. Half of local private sector workers age 18 to 64 work for businesses that don’t offer retirement programs.

There is another option. States including Oregon, California and Illinois have taken action with a retirement savings program that can be offered to workers at no cost to their employers. As of Sept. 30, more than 400,000 people have been able to save $333 million toward their futures.

Hawai‘i Saves Retirement Task Force

Hawai‘i also is getting closer to helping small businesses and their employees with an easy way to save. In 2021, the state Legislature passed a resolution (SR 76 SD1) that established a retirement savings task force to study the feasibility of a state-facilitated retirement savings program.

“Giving employees a simple way to save for retirement will mean fewer Americans will need to rely on public assistance later in life, which will save taxpayer dollars,” SugaNakagawa says. “In fact, states taking action today could save taxpayers as much as $4.8 billion in the next 10 years. This is why the legislature-appointed retirement savings task force that is completing their study and making recommendations, would be very significant and important for Hawai‘i’s future.”

Lisa Massena, former executive director of the OregonSaves program, believes Hawai‘i workers, like Oregon workers, will save if offered a payroll deduction retirement program. “What we’ve found is that 70% stay in the program when this is an option,” Massena says. “People have this assumption that if you make a little less than most or if you have an hourly job, you don’t care about savings, and you’re not given the same opportunity or option to save. It’s a stereotype. But we’ve learned that if you flip the script and give people the opportunity to save, they often want to.”

A recent survey found four out of five of Hawai‘i’s small businesses favor a state-facilitated retirement Continued on page 12

Every Voice Matters

There are several ways you can help create a Hawai‘i Saves program for your financial security and that of future generations as well.

Submit written testimony in favor of a Hawai‘i retirement savings program for private sector workers.

Contact your lawmaker to express your support.

Spread the word! Tell family and friends and ask them to lend their voices, too. Email Audrey Suga-Nakagawa, AARP Hawai‘i Advocacy Director, at

asuganakagawa@

aarp.org to find out more.