State Retirement Savings Initiatives Do More than Enhance Retirement Security for Private Sector Workers

Segal Study Estimates How Increased Retirement Savings
Can Offset the Cost of Medicaid

For many Americans, retirement security seems like an impossible dream. Over the past several years, a number of states have looked at how to make retirement attainable while at the same time reducing their Medicaid spending.

But how do they do this?

  • One option is for states to create a path to workplace retirement savings.
  • A second option is to give residents access to a retirement “marketplace” operated by the state.

A Segal Consulting study suggests states could reduce their Medicaid costs by implementing a state-sponsored retirement savings plan that is made available to their residents working in the private sector (who don’t currently participate in a retirement program at work).

Our analysis showed that when residents participate in a retirement plan and attain that all-important nest egg, it kept them above the poverty line, allowing the states to see a meaningful reduction in Medicaid spending.

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Wendy Carter

Wendy Carter

VP, National Public Sector Defined Contribution Practice Director

Leon Joyner

Leon Joyner

VP and Actuary