Bipartisan, bicameral Retirement Savings for Americans Act would make saving for retirement attainable for American workers
WASHINGTON – Today, U.S. Senators John Hickenlooper and Thom Tillis and Representatives Lloyd Smucker and Terri Sewell reintroduced the Retirement Savings for Americans Act (RSAA) to help working Americans build wealth and save for retirement.
“Americans who work hard their entire lives deserve to retire with dignity,” said Hickenlooper. “This bill helps low-income workers enjoy a secure retirement and fulfill their American dream.’’
“Roughly 50 million Americans lack access to an employer-sponsored retirement plan, which represents a significant roadblock to achieving financial security for their retirement,” said Tillis. “The Retirement Savings for Americans Act tackles this real problem by establishing a pathway for savings for Americans lacking retirement options.”
“Too many hard-working Americans are not able to prepare financially for retirement. Over half of working employees lack access to the tax-advantaged retirement benefits that many higher-income earners take advantage of to save. Additionally, as the workforce continues to innovate and more Americans become categorized as “gig workers,” the reliance on traditional employer-sponsored plans causes too many workers to slip through the cracks. Hard-working Americans deserve a modern pathway to find financial security in their retirement. I am proud to join in this bipartisan and bicameral effort to advance the Retirement Savings for Americans Act, to help millions of Americans save for their retirements. I will continue to advocate for policies which help hard workers live their American Dream, including a well-earned and financially stable retirement,” said Smucker.
“Every Alabamian and every American should be able to retire with dignity after a lifetime of work,” said Sewell. “Democrats and Republicans alike recognize the urgent need for Congress to address the gaps in our retirement system and make it easier for low- and middle-income workers to save for retirement. I am proud to once again work with my House and Senate colleagues on both sides of the aisle to advance the Retirement Savings for Americans Act which would level the playing field for working families and build a stronger economy for all Americans.”
The bill would establish a new program that gives eligible workers access to portable, tax-advantaged retirement savings accounts. It would also allow the federal government to match contributions for low- and middle-income workers, with the match beginning to phase out at median income.
“Nearly 1 out of 4 Americans has no retirement savings, and more than half of all Americans report they are concerned they will not achieve financial security in retirement. We know that Americans are much more likely to save when they have access to retirement savings options at work. Today nearly half of all private-sector employees do not have access to an employer-sponsored retirement savings program. The Retirement Savings for Americans Act would help more families across the country save for retirement,” said Bill Sweeney, Senior Vice President of Government Affairs, AARP.
“Creating this kind of program meets an obligation we all share to help every working American build financial security and well-being in retirement. I also know it will offset future support we surely would have to provide if we don’t help more people begin to build that security today. And in true American spirit, it isn’t a giveaway, but an incentive for working individuals to begin helping themselves and their families,” Charles R. Schwab, Founder and Chairman, Charles Schwab Corporation.
“The Retirement Savings for Americans Act would create a healthier retirement system, a more financially secure workforce, and a stronger economy for all Americans,” said John Lettieri, President and CEO, Economic Innovation Group. “By ensuring that all workers — regardless of their employer or income — have the opportunity and incentives to build long-term financial security, the RSAA would boost the wealth of the working class and significantly reduce the strain on the social safety net over time. EIG is proud to have worked closely with Senators Hickenlooper and Tillis and Representatives Smucker and Sewell on this important legislation, and we applaud them for their bipartisan leadership on behalf of American workers.”
Specifically, the Retirement Savings for Americans Act 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, contributing 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.
View a one-page explainer of the bill HERE.
Full text of the bill is available HERE.
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