Only about half of workers have workplace retirement plans, according to Pew Charitable Trusts. Without automatic enrollment and payroll deductions, many people do not save in other retirement vehicles such as IRAs. One-third of Americans have no retirement savings, according to a survey by GoBankingRates.com.Ida Rademacher, head of the Financial Security Program for think tank Aspen Institute, says there is a way to plan ahead.North State Journal: Is it our fault for not saving enough, or is it the system’s fault?Rademacher: A lot of people see this as a personal failure, but part of the problem is that we have a system that is not set up to facilitate savings. With small businesses, or with freelancers and contractors, there are an awful lot of gaps in access to retirement plans. And people are changing jobs so often these days that they might have four or five little pots of money, which then just get cashed out.North State Journal: What are some solutions?Rademacher: An exciting initiative is dual-account systems, which encourage both short-term and long-term savings at the same time. A lot of research has shown that this will really work. Because often when people get financial shocks, they have no choice but to raid their retirement savings. If you build an emergency fund simultaneously, then you have another recourse.Apps such as Even are helping people deal with fluctuating income. If your income spikes one month, it will put some into savings; if you have a shortfall one month, it will give some of that back. Another company called Digit takes out micro amounts of savings, at random moments based on your cash flow, and then texts to let you know. Other apps get people to focus on saving the first $500, kind of like Couch-to-5K programs for savings.North State Journal: What are companies doing to take the lead on this and get their employees saving?Rademacher: Some companies are taking a fintech (financial technology) approach to retirement saving, like Uber partnering with Betterment and Lyft with Honest Dollar. Employees can sign up for retirement saving with a few taps on their smartphone. These days, companies that attend to workers’ financial wellness are becoming employers of choice.North State Journal: Look into the future, where is our retirement system going to be in five or 10 years?Rademacher: I would hope there will be more automation, more transparency, more people saving.
