Should The State of Illinois Help You Save For Retirement? [AUDIO]
There's a story that's been popping up on the show for the past few weeks and every time we talk about it we get calls and emails saying, "Is that really true?"
Indeed, it is. Democrats in the Illinois Senate are trying to find the votes to pass a bill that would establish a state-run retirement savings program for private-sector workers. That is, the same people who lost millions of hard-earned college savings in the Bright Start program and the same people who have left Illinois with billions in unpaid bills and unfunded pension debt want to have a hand in managing your retirement savings.
What could go wrong?! Well, we talked about it with State Senator Dave Syverson.
First, here are the details of the proposal:
The proposal calls for businesses without retirement plans and that have 10 or more employees to enroll workers in a savings program overseen by the state. Typically, 3 percent of each participant’s paycheck would be pooled into a privately managed investment account overseen by a new state board. Employers would be required to sign up workers, but employees could opt out.
Got that? Unless you opt-out, the workers covered in the plan would see an additional 3 percent of his take-home pay gone to Springfield to fund a state-run retirement plan. And that's on top of whatever tax hikes Illinois Democrats might be able to cram through this year.
And to what end?
[Biss] says this program would help millions of Illinoisans who don’t have access to employer retirement savings programs.
Somebody has never heard of IRAs, which are readily available to everyone and are constantly advertised. Or even savings accounts, for goodness sake. That likely would be safer than trusting the state with your retirement money.
State Senator Dave Syverson spoke against the bill in committee. He told us:
One size can't fit all. You're talking about taking an individual, who might not be making a whole lot of income, and you're going to force them to save for retirement. That's not a bad thing except if that same individual has credit card debt at 18 percent interest...maybe sit that person down and say, "Let's put that extra 3 percent toward paying off the cards, then look at saving money."
Our full interview with Senator Syverson is below. We also touched on the Governor's end-around on lawmakers regarding two appointments and the possible progressive tax hike: