Washington, D.C. – U.S. Reps. Terri Sewell (AL-07) and Lloyd Smucker (PA-11) and U.S. Senators John Hickenlooper (D-CO) and Thom Tillis (R-NC) introduced the Retirement Savings for Americans Act (RSAA), bipartisan legislation to help low- and middle-income Americans build wealth and save for retirement. The bill would establish a new program that gives eligible workers access to portable, tax-advantaged retirement savings accounts. If passed, the RSAA would allow the federal government to match contributions for low- and middle-income workers, with the match beginning to phase out at median income.

“Every Alabamian and every American should be able to retire with dignity after a lifetime of work,” said Rep. 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.”

“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 Rep. Smucker.

“Americans who work hard their entire lives deserve to retire with dignity,” said Sen. 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 Sen. Tillis. “The Retirement Savings for Americans Act tackles this real problem by establishing a pathway for savings for Americans lacking retirement options.”

A study by the National Council on Aging found that 80% of aging Americans are struggling financially or are at risk of financial insecurity, and therefore, not prepared to retire. In a new ranking of the world’s retirement systems, the U.S. scored a C+, mainly because the current system works well for white collar workers but fails gig workers and blue collar workers. If trends continue, inadequate retirement savings will cost state and federal governments a combined $1.3 trillion in increased spending by 2040. 

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 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.

The RSAA enjoys broad support. View a full list of endorsements here. 

“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.” 

“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.” – 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. Read Mr. Schwab’s full statement.

“With more Americans choosing new ways to work than ever before, we're proud to support this bipartisan effort to enable more workers in the modern economy to access the kinds of benefits that have long been out of reach for all but full-time employees. This is an important step toward empowering workers like Dashers to choose the independence and flexibility that dashing gives them, while still having access to important benefits. The Retirement Savings for Americans Act makes meaningful progress toward expanding access for retirement savings across the country–regardless of how someone chooses to work. We applaud Senators Hickenlooper and Tillis and Representatives Sewell and Smucker for working across the aisle to address such an important issue for Dashers and other Americans who are choosing new and different ways to work.” – Max Rettig, Vice President of Public Policy, DoorDash 

"Uber supports forward-looking legislation like the Retirement Savings for Americans Act to improve independent work across the nation. The bill represents a novel, thoughtful approach to bridging gaps in the existing retirement savings framework. We commend the Congressional sponsors for their ongoing efforts to advance this legislation." – Javi Correoso, Head of Federal Affairs, Uber

Bill text is available here.