Millennial workers facing retirement challenges
Secure Choice Board learns about student debt time bomb
Younger workers–including state employees–are facing added challenges to their retirement plans, according to testimony at the California Secure Choice Retirement Savings Investment Board.
Erin Thuston, a member activist at the Department of Social
Services, told the Board Oct. 27 how huge college debts are
having an impact today on retirement decades in the future.
Thuston owes $165,000 on student loans, to finance college and
graduate school–and like many of her peers, she’s weighing that
immediate debt against the need to plan for her future.
“Student loan debt is one of the defining issues of my generation–and it affects other generations,” Thuston said. “The retirement issues of young professionals in their 20s and early 30s may seem far off for a board that is developing a system to help people retire in their 60s, but we are California’s future.”
A recent study by the Federal Reserve Bank said that millennials are burdened with over $1 trillion in student loan debt that will last decades, and that debt has caused a drag on the economy, dampening the recovery and hurting the housing market while those debts are paid off.
The Secure Choice Board, an appointed body that includes Local 1000 President Yvonne R. Walker, was created last year by state law to design and plan a secure retirement savings program for workers who do not have access to a pension or 401(k) at work.
“The board is focused on providing workers of all ages the opportunity to retire with dignity,” said Walker. “As we work to develop the program, we take into account the challenges younger workers face.”
At the Oct. 27 meeting, the board also discussed plans to introduce legislation in 2015 that would launch the Secure Choice retirement plan once its planning and development phase is completed.