Washington Saves Retirement Savings Program Could Build Retirement Savings for Millions of Workers

Although most Americans save for retirement through employer-provided retirement plans, nationwide nearly half of private-sector workers lack access to retirement savings at work. In Washington, as many as 1.2 million workers­—or 43% of the state’s private-sector workforce—are in this category. Workers of color in the state are in worse shape, with 47% of Black workers and 66% of Hispanic workers without workplace retirement benefits.

Because many employers, including small businesses, are unable to provide retirement benefits because of high startup costs and a lack of administrative capacity, policymakers must grapple with a key question: What happens when the state’s residents don’t have enough money to retire? 

By 2040, vulnerable older households in Washington will face an average income shortfall of $4,810 per year.

From 2020 to 2040, the ratio of older households to working-age households in Washington will increase by 36%.

Lack of savings will lead to $3.8 billion in increased state spending from 2021 to 2040.

Earlier this year, lawmakers introduced legislation to establish the Washington Saves program, an automated savings program that will make it easier for businesses to help workers save for retirement. Such a program would make it easier for businesses in the state to help workers save for retirement by creating individual retirement accounts (IRAs) and automatically enrolling workers who don’t have access to employer-based benefits—all at no charge to employers. Businesses would simply enroll their workers and process employees’ payroll deductions, and workers would always control their contribution level and could opt out at any time; no one would be required to participate. If Washington were to enact such a program, it would join 15 states that have established similar programs to help workers save.

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Features of Washington Saves:

  • It’s an easy-to-use, no-cost retirement benefit that employers can provide to their employees.
  • It’s not mandatory for workers, so savers can opt out at any time.
  • Participants can withdraw their contributions at any time, tax- and penalty-free.
  • Workers always own their IRAs; the state and the employer have no claim on workers’ contributions.
Article November 15, 2023

Washington Small Businesses Support Retirement Program

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Article November 15, 2023

A large majority of small-business owners in Washington state support creation of a state-facilitated retirement savings program that would help private sector workers who don’t have plans through their jobs put money away for retirement.

Fact Sheet January 16, 2024

'Washington Saves' Would Help 1.2M Workers Save

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Fact Sheet January 16, 2024

Retirement security is largely dependent on people saving money through a plan provided by their employer, but millions of Americans lack access to this important benefit. Research shows that workers are 15 times more likely to save for retirement if they can do so through payroll deduction, but many small businesses are unable to offer retirement benefits due to high startup costs and a lack of administrative capacity.

Visit the project home page for more information on The Pew Charitable Trusts’ work on retirement savings.

Downloads Washington Small-Business Owners Support New Retirement Solutions (PDF)