AARP Backs Bill to Help More Workers Save for Retirement

En español | Nearly 1 in 4 Americans lacks a retirement nest egg, and more than half worry about financial security in their golden years, according to the National Institute on Retirement Security.

And while people are 15 times more likely to save when they can do so at work, according to AARP research, nearly half of all private-sector employees lack access to a 401(k) plan or other retirement savings option through their employer.

That’s why AARP wrote to U.S. congressional lawmakers last week in support of the Retirement Savings for Americans Act, which would create a federal retirement savings plan for those who aren’t offered one at work. The proposed plan would be similar to one offered to federal employees.

The legislation would build on AARP’s work in states across the country to increase access to retirement savings programs, especially for those working for small businesses.

Lawmakers in 19 states have passed legislation to make it easier for individuals to save for retirement, most recently in Minnesota, Missouri, Vermont and Nevada last year, and in Delaware and Hawaii in 2022.

Under the federal legislation, employees without access to a retirement savings vehicle at work would be automatically enrolled in a Roth IRA at a 3 percent contribution rate, unless they opt out. Low- and moderate-income workers would be eligible for a 1 percent automatic federal contribution as long as they’re employed, and up to a 4 percent matching contribution through a federal tax credit.

“AARP believes improving the health and financial security of older Americans is central to ensuring they can have a fulfilling and dignified life as they age,” we wrote in letters to the bill’s sponsors.

Read our letters to the House and Senate, and learn more about AARP’s retirement planning resources.

Natalie Missakian covers federal and state policy and writes AARP’s Fighting for You Every Day blog. She previously worked as a reporter for the New Haven Register and daily newspapers in Ohio. Her work has also appeared in the AARP Bulletin, the Hartford Business Journal and other publications.