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A Dimming Dream Of Retirement In California

June 21, 2018 1:37 p.m.

A Dimming Dream of Retirement


John Chiang, Treasurer, State of California

Related Story: A Dimming Dream Of Retirement In California


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

>>> You're listening to KPBS Midday Edition I am Allison St. John in for Maureen Cavanaugh. California has one of the highest numbers of seniors living in poverty in the United States outranked only by Washington DC. Escalating rents in healthcare costs force many California elderly into a path of downward mobility. As part of our statewide collaboration called the California dream, we have this report.
>> Reporter: Roseann Goodman is 63. She lives on her own outside San Diego. Her friend since $200 each month. Other friends give her grocery store gift cards. They treat her to meals.
>> I accept it with such gratitude. Who I was five or 10 years ago, I could have never asked or taken.
>> Reporter: Now pride is a luxury she cannot afford. Goodwin received 2060 and Social Security each month. Some of it includes disability for the rare form of brain cancer she has. Her monthly expenses are $2400. She tries to make up the difference by growing her own food and selling belongings on eBay.
>> I have sold whatever I could that is around the house. It might mean Handtools I had since I was in my 20s that my dad gave me for being out on my own.
>> Reporter: Goodwin worked 35 years as a sales Representative at companies like Xerox. She said she set aside 10% of her earnings for retirement. Laos and her health problems depleted her savings. She has been thrown another wrench. Her rent is about to go 50% on her one-bedroom apartment. She says the new owners do not care that she cannot afford it.
>> It is deplorable to me that we are considered disposable.
>> Reporter: The advocacy group justice and aging says Hello housing and healthcare costs along with the decrease in company pensions have made it tough for people to save for their later years. The group says elderly women are twice as likely to live in poverty as men. Overall, the prognosis is gloomy.
>> About half of Californians who are working are on track to retire with incomes at the poverty line which is roughly $24,000 a year that will not get you very far in California.
>> Reporter: Night read is the director at the UC Berkeley labor center.
>> We are looking at downward mobility. That is not the California dream.
>> Reporter: She says in your deployment -- employment in California is at all-time high. 70% of people in the state between the ages of 65 and 74 work. That is more than doubled in the 1980s. 19% of Californians older than 75 also work.
>> I work all the time.
>> Reporter: Merigold Harley is a realtor in San Diego. She turned 70 next month. She also lives by herself.
>> I would love to be retired. I know I would have people for dinner every day. Work in my garden.
>> Reporter: She says savings and Social Security are not enough.
>> I feel betrayed. I feel like there should've been some education. Everyone is afraid of growing old so no one talks about these things. We were expected to get married. That was going to solve our problems. In my case it did not happen.
>> Reporter: Kevin Prinivil is a director for justice and aging.
>> Seniors of the people who cared for us. It is heartbreaking. They built our communities, taught our kids, worked in hospitals, they built our cities and state.
>> Reporter: He says many California seniors are struggling to just survive.

>>> This story is part of our statewide California dream collapse nation -- collaboration. Joining us now is John Chung who is talking about how California is taking steps to build a better safety net that is called Cal savers. It offers seniors who don't have a retirement plan through employers a way to save to supplement their Social Security. Thank you for joining us. Start by telling us how does Cal savers work and why do you think it is important.
>> We have a growing crisis in California and the United States of America where the next generation of California Americans are going to retire in greater likelihood of poverty than this generation with the global competitiveness and the economy. We have a lot of companies that are not providing a retirement savings plan for their workers. Here in California, we have seven and half million Californians who are working and their employer does not provide a retirement plan. Cal savers is the most significant development in Social Security. What it provides is if you have an employer that has five or more employees, we will have a plan that is available automatic enrollment so that people can start saving money. They can opt out. When they have a plan, people start to say. There is greater likelihood of enrollment. We want to see people who worked hard the whole lives to have goals and retirements.

>>> If it is rolled out, is it voluntary or mandatory?
>> It is a program that the employer's as I pointed out who have five or more employees will pass along paperwork and information so that the employees can dissipate. The employees will acknowledge they got the information. They can choose not to participate in the program. Is voluntary.

>>> What will happen next year ? how will workers sign up for it?
>> Individuals, as we witness those transforming in this economy they can participate themselves. It does not have to be those information's where the employers are providing them with some information. We want to make sure that we expand this platform. This program will go into phase later this year. We will have lots of companies participate at the outset we will roll this program in so that eventually all of the participants can take advantage of Cal savers.

>>> Whether you are in the -- with the employer or the gig economy.
>> Those in the gig economy who are automatically contacted, that's why we are trying to get the information out to individuals so they can voluntarily participate. We want to make sure that all Californians get this opportunity. We don't want to see what was reported by so many people that with the change of demographics, the change in the nature of work that people are left out from having the opportunity to get the best opportunities to save for their retirement.

>>> This plan is being challenged by the Harvey -- tax Association saying it's illegal under federal law, is it?
>> I think it is unfortunate that this association that advocates for taxpayers, wants to take away an opportunity for individuals who want to say for their golden years. This is a smart program. It is voluntary. Individuals that participate they get to save and we provide them better opportunities. They have filed suit. I cannot comment on the merits of the litigation. We are fully competent -- confident we will prevail.

>>> At the key question for them is would Cal savers require raising taxes?
>> It would not. This is similar to the states college savings program. Individuals save money for their kids, their loved ones college future. It does not involve taxpayer dollars. Cal savers except for initial loans will be repaid with interest. It does not involve taxpayer dollars. We do not know why they would put this challenge up.

>>> Thank you so much for joining us.

>>> Thank you for having me.