WASHINGTON – Today, U.S. Senators John Hickenlooper and Thom Tillis and Representatives Lloyd Smucker and Terri Sewell welcomed the AARP’s endorsement of their bipartisan, bicameral Retirement Savings for Americans Act (RSAA). The RSAA would establish a new program that gives eligible workers access to portable, tax-advantaged retirement savings accounts to help low- and middle-income Americans build wealth and save for retirement.
“AARP fights for older Americans, many of whom retire without sufficient savings,” said Senator Hickenlooper. “We’re grateful for their support to help working Americans build savings and retire without fear and stress.”
In a letter of support, AARP Senior Vice President of Government Affairs Bill Sweeney writes: “AARP, which advocates for the more than 100 million Americans age 50 and older, writes to express our support for your efforts to extend access to retirement savings to more Americans through the Retirement Savings for Americans Act.”
The letter continues: “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 are excited to see the potential to cover even more of America’s workers through federal legislation.”
“Roughly 40 million Americans lack access to an employer-sponsored retirement plan, which represents a significant roadblock to achieving financial security for their retirement,” said Senator Tillis. “I want to thank the AARP for endorsing the Retirement Savings for Americans Act that tackles this problem by establishing a pathway for savings for Americans lacking retirement options.”
“Thank you to AARP for endorsing the Retirement Savings for Americans Act. Too many hard-working Americans are not able to prepare financially for retirement. The RSAA will help millions of Americans save and find financial security in their retirements,” said Rep. Smucker.
“I would like to express my gratitude to AARP for their endorsement of the Retirement Savings for Americans Act. The RSAA is a commonsense bipartisan bill that will allow millions of Americans to participate in structured retirement plans for the very first time. This is a major step in our effort to ensure that all Americans have access to the resources that will allow them to achieve financial security,” said Rep Sewell.
Read the full AARP endorsement letter HERE.
The Retirement Savings for Americans Act, reintroduced by Hickenlooper this October, contains the following provisions:
- Eligibility and Auto Enrollment: Full- and part-time workers who lack access to an employer-sponsored retirement plan would be eligible for an account, and they would be automatically enrolled at 3% of their income. They could choose to increase or decrease their withholding or opt out entirely at any time. Independent workers (including gig workers) would also be eligible.
- Federal Contribution: Low- and moderate-income workers would be eligible for a 1% automatic contribution (as long as they remain employed) and up to a 4% matching contribution via a refundable federal tax credit. This would begin to phase out at median income.
- Portability: Accounts would remain attached to workers throughout their lifetimes, and workers would be able to stop and start contributions at will.
- Private Assets: The accounts would be the property of the worker and the assets could be passed down to future generations to help them build wealth and financial security.
- Investment Options: Much like the current Thrift Savings Plan, participants would be given a menu of simple, low-fee investment options to choose from, including lifecycle funds tied to a worker’s estimated retirement date, or index funds made of stocks and bonds.