Bipartisan proposal, the first of its kind, aims to break cycles of poverty and improve financial literacy.
A newborn with a retirement account? It would be guaranteed in Wisconsin under a newly proposed program.
The bipartisan proposal, dubbed 401(K)ids and introduced by state Treasurer Sarah Godlewski, Rep. Evan Goyke (D-Milwaukee), Rep. John Macco (R-Ledgeview), and Sen. Janis Ringhand (D-Evansville), would deposit $25 into a state-managed investment account for all children born or adopted in Wisconsin. If the policy is adopted, Wisconsin would become the first state in the nation to have a universal retirement program, according to the proposal’s authors.
“Most people don’t have a retirement fund, or a lot of them don’t, and they’re depending on Social Security, which is really not enough to carry them through,” Ringhand said. “And a lot of young families don’t think about saving for children, so when they get to college age, they don’t have the funds they need.”
The program comes from recommendations made by Gov. Tony Evers’ Task Force on Retirement Security, which Godlewski led in 2019. Findings in the task force’s report included the fact that 1 million Wisconsinites ages 18-64—about half the state’s workforce—don’t have access to a retirement plan through their employer, and an estimated 400,000 seniors will slip into poverty by the end of the decade, costing the state an additional $3.5 billion in public assistance.
“When you look at the problem, it’s a real crisis. … The risk is too great not to take any action,” Godlewski said.
Goyke, whose district includes some high-poverty Milwaukee neighborhoods, said 401(K)ids would help break generational cycles of poverty and fight racial disparities because it would encourage saving from a young age. Because it comes at a relatively low cost for each child and would help increase financial independence, the proposal should be an appealing prospect to all sides of the political spectrum, he argued.
“Helping people save their own money prevents reliance on any kind of social safety net,” Goyke said. “So if a libertarian or a conservative sees this [proposal] and says, ‘Well, the government’s doing something, so I’m against it,’ they have to understand that creating an account at birth and allowing this money to grow will actually prevent government growth in the long run.”
Goyke, Ringhand, and Macco began circulating the bill for co-sponsorship last month. They have not yet formally introduced it but are hopeful it will get support from both sides of the aisle. Goyke said he hopes to have the bill introduced and assigned to a committee by mid-February.
“I think we’ve got a really strong case to move it forward,” Goyke said.
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