State-facilitated retirement savings plan bill moves through Hawaiʻi legislature

A study by the AARP’s Public Policy Institute, which was released last year, found that Hawaiʻi would save $32.7 million on public assistance programs between 2018 and 2032 if lower-income retirees save enough to increase their retirement income by $1,000 more per year.

“The average savings of a household are a total of $2,500,” Schneidewind said. “For those households that are nearing retirement, it’s only about $14,500. … Of all the ways to stimulate savings, the payroll deduction plan has proven to be about 15 times more effective than anything else in terms of participation. It relies on that idea that if you save before you have the money to spend, that’s a much more reliable framework.”

Those in support of the bill include Retail Merchants of Hawaii, the Hawaiʻi Appleseed Center for Law & Economic Justice and medical cannabis dispensary owner and attorney James H.G. Lee, among others.