group-bowlThere’s no escaping the fact that people in Hawai‘i pay the price of living in paradise. The cost of living is about 60 percent higher than in most states, while wages are among the lowest when adjusted for Hawai‘i’s high cost of living.

Housing is particularly expensive. The Honolulu Board of Realtors reported that the median sales price of a single-family home was $750,000 in November. Meanwhile, the 2015 median monthly rental costs of a home was $1,500 (U.S. Census, American Community Survey).

It is difficult enough for working families to make ends meet with a regular paycheck, but it’s even harder when people retire and live on a fixed income that doesn’t keep pace with rising costs. And unfortunately, many residents are not saving enough for retirement.

The National Institute on Retirement Security reports that the average working household in the U.S. has virtually no retirement savings. When all households are included — not just households with retirement accounts — the median retirement account balance is $2,500 for all workingage households and $14,500 for near-retirement households. And, the growing dependence on Social Security poses an additional challenge. The program was never meant to provide more than one-third of retirement income. But in 2016, nearly 26 percent of Hawai‘i retirees relied completely on Social Security and 50 percent depended on it for half of their retirement income. The average monthly Social Security benefit of $1,408 is not enough to live on in Hawai‘i without government help or continuing to work full- or part-time.

People living only on Social Security are more likely to need taxpayer-subsidized food, medical insurance and housing.

A new AARP Hawaii survey of registered voters ages 35 to 64 found that:

  • 49 percent feel behind in saving for retirement;
  • 56 percent feel anxious about having enough money saved for retirement;
  • 79 percent are concerned as taxpayers that those who are not able to save for retirement will end up on public assistance.

Heavier reliance on our social safety net programs imposes an increased tax burden for all Hawai‘i residents unless we can figure out real ways to help more workers save for retirement.

Roughly half of Hawai‘i’s workforce doesn’t have a way to save for retirement at work, even though we know that a retirement plan that lets workers save out of their regular paycheck makes them 15 times more likely to save for retirement than those without that access.

There are 216,000 private sector workers in Hawai‘i who don’t have access to retirement savings at work, even though it’s the most important factor in a person’s ability to save for retirement.

So what can Hawai‘i do to help these workers?

Eight states (California, Illinois, Oregon, Maryland, Connecticut, Massachusetts, Washington and New Jersey) have passed legislation that offers workers access to a retirement savings program. Hawai‘i is among two dozen other states considering similar steps to help future retirees.

A resolution to address this issue is before the 2017 Legislature. If passed, a work group of business and community stakeholders will study and recommend strategies to help more people save and enjoy a retirement with real possibilities in Hawai‘i Nei.


State Office: 808-545-6024 | Toll-Free: 866-295-7282 |