Keystone Saves Can Build Retirement Savings for Millions of Pennsylvanians

Inside Pennsylvania's Widening Retirement Savings Gap

Most Americans get their retirement plans through their workplace, but large gaps in coverage exist—and Pennsylvania is no different. About one-third of workers in the state do not have retirement plans through their jobs despite working full-time. That’s roughly 2 million people in the private sector alone.

As more Pennsylvania workers age, the gap in retirement savings puts pressure on state budgets and increases the tax burden for businesses and residents. And we know it’s going to happen. Pennsylvania has estimated that its retirement savings gap will cost taxpayers more than $14 billion over a 15-year period. During that same time, the ratio of Pennsylvania households ages 65 and older compared with working age households is expected to grow by nearly 50%.

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PA workers who don’t have a retirement plan through their jobs TWEET

“Keystone Saves helps younger workers start saving early.” TWEET

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$14 billion over 15 years

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Taxpayer cost due to PA retirement savings gap TWEET

So, what now? The good news is that Pennsylvania lawmakers have taken notice. A new bill—which would create the Keystone Saves program—is being considered right now to help prevent this fallout. The program gives workers without current workplace retirement plans the opportunity to save for retirement. The program allows participants to make automatic and regular payroll contributions to fund individual retirement accounts (IRAs)—at no cost to employers. Ten states are already offering this auto-IRA savings solution, where they’ve seen 60% to 80% of eligible workers participate.

Pennsylvania State Capitol, the seat of government for the U.S. state of Pennsylvania, located in Harrisburg
Pennsylvania State Capitol, the seat of government for the U.S. state of Pennsylvania, located in Harrisburg
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Other Keystone Saves advantages:

  • A no-cost retirement benefit that employers can provide to their employees.
  • It’s not mandatory, so savers can opt out at any time.
  • Participants can withdraw their contributions at any time, tax- and penalty-free.
  • The worker always owns the IRAs; the state and the employer would never have a claim on the savings.

Taxpayer Burden Due to Insufficient Retirement Savings

Taxpayer Burden Due to Insufficient Retirement Savings
Man at door
Man at door
Article

Saving $25 a Week Could Erase the Gap

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Article

Saving $25 a Week Could Erase the Gap

Retirement income from a variety of sources—generally Social Security, personal savings, and employer-sponsored savings plans—ensures workers a sound financial future. But for many Americans, a part of this puzzle is missing.

Rotunda at the Pennsylvania Capitol Harrisburg
Rotunda at the Pennsylvania Capitol Harrisburg
Fact Sheet

How Keystone Saves Really Works

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Fact Sheet

How Keystone Saves Really Works

The Pew Charitable Trusts urges the creation of Pennsylvania’s Keystone Saves. This state-facilitated retirement savings program for businesses without a retirement plan relies on regular payroll contributions to fund individual retirement accounts (IRAs).

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