Oregon is one of a growing number of states that offers a government-run automatic IRA program that workers can enter into to set aside a portion of their wages if their employer doesn’t already have a workplace retirement program. The state’s plan is called OregonSaves, and a growing number of workers are using it as a valuable resource to save for retirement and pick up the slack as Social Security’s future is unknown.
The Basics of Auto-IRAs
The plans are fairly straightforward, diverting a portion of each paycheck into an IRA that could lead to big savings over time. A new PEW Trust article underscores the importance of these accounts. About 42% of private-sector workers in America lack access to a workplace retirement savings plan, leaving them with no clear path to retirement savings and potential greater reliance on Social Security.
These IRAs offer a bit of peace of mind, especially for those that want to retire at age 62. Earners could lean on those funds and delay filing for Social Security benefits for a year or more. This will increase the monthly amount Social Security pays. The study notes that with just a 3% default contribution rate, 39% of workers could delay taking benefits by a year, and 20% could delay by two years or more.
The auto-IRA option could lead to new pathways for workers generally shut out of traditional retirement options. Of course, waiting longer to take Social Security means more in the monthly payout.
Thinking about the relationship between OregonSaves and Social Security now can save significant headaches later on when it comes time to withdraw if you’re concerned about your future eligibility for Social Security. If you’re already facing issues with Social Security in Oregon, then it’s time to consult a qualified Social Security claims attorney. Call Drew L. Johnson, P.C., today at (541) 434-6466 to schedule a free consultation.