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AARP-Backed Bills Take Aim at U.S. Retirement Savings Crisis

ROTH, IRA, 401K Text on Eggs in a Nest
Nora Carol Photography/Getty Images

En español | AARP wrote to federal lawmakers this month in support of two bills designed to help more Americans save for retirement through their jobs.

The Automatic IRA Act of 2024, endorsed by AARP Feb. 7, would expand retirement plan coverage to the millions of U.S. workers who lack an employer-sponsored retirement plan at work. The bipartisan Auto Re-enroll Act of 2023, endorsed Feb. 14, would allow plan sponsors to re-enroll their employees at least once every three years, unless the worker opts out. This would help more workers take advantage of their retirement plans and any matching funds from their employer.

Too many workers “leave money on the table” by not signing up to contribute to their workplace plans, sometimes simply because they forget or are overwhelmed by HR paperwork, we wrote in a letter to the bill’s sponsors. Research from Vanguard shows a third of employees aren’t taking advantage of their employer’s full matching contribution.

The Auto Re-enroll Act “will increase plan participation, help prompt employees to take better advantage of their benefits, and increase their retirement savings,” wrote Bill Sweeney, AARP senior vice president for government affairs.

Meanwhile, under the Automatic IRA Act, employers would be required to automatically enroll their employees in an IRA or another type of automatic contribution plan, like a 401(k), if they don’t already offer a retirement plan to their workers. Workers would begin with a default contribution of 6 percent, unless they opt out. Employers would be eligible for a tax credit to defray the cost of administering the program.

AARP has long fought for state and federal measures to boost retirement savings. Nearly 1 in 4 Americans lacks a retirement nest egg, and more than half worry about their financial security in retirement, according to the National Institute on Retirement Security. However, AARP research shows people are much more likely to save when they can do so at work, especially if the saving is automatic.

AARP’s latest endorsements follow our support in January of the federal Retirement Savings for Americans Act, which would create a federal retirement savings plan for Americans who aren’t offered a savings option through their job. That proposed law would build on AARP’s work to implement state-facilitated retirement programs to increase access to retirement savings programs across the country.

We’re also fighting for laws that would require all financial professionals to put their client’s best interests before their own when giving advice on retirement investments.

Read our endorsements of the Automatic IRA Act and the Auto Re-enroll Act, and learn more about how to build your retirement nest egg.

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.

Also of Interest:

AARP Retirement Calculator: Are You Saving Enough?
Top 5 States Where Retirees Are Moving
7 Steps to Start Saving for Retirement After 50

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