Bipartisan Bill Aims to Expand Retirement Savings for Low- and Middle-Income Workers

A group of bipartisan lawmakers has introduced legislation designed to help millions of American workers build secure retirements. The Retirement Savings for Americans Act (RSAA) was unveiled by U.S. Representatives Terri Sewell (D-AL) and Lloyd Smucker (R-PA), along with Senators John Hickenlooper (D-CO) and Thom Tillis (R-NC). The bill targets workers without access to employer-sponsored retirement plans — a group estimated at 50 million nationwide.

If passed, the RSAA would establish portable, tax-advantaged retirement accounts for eligible workers. It includes automatic federal contributions and matching funds for low- and middle-income earners. Gig workers and part-time employees, who are often excluded from traditional retirement plans, would also qualify.

“Every Alabamian and every American should be able to retire with dignity after a lifetime of work,” said Rep. Sewell in a statement. “Democrats and Republicans alike recognize the urgent need for Congress to address the gaps in our retirement system.”

Rep. Smucker echoed the sentiment: “Too many hard-working Americans are not able to prepare financially for retirement… Hard-working Americans deserve a modern pathway to find financial security in their retirement.”

The legislation responds to a growing retirement crisis. A 2023 report by the National Council on Aging revealed that 80% of aging Americans are financially insecure or at risk of becoming so. Meanwhile, the U.S. earned a C+ in the Mercer CFA Institute Global Pension Index, with experts noting that the current system favors salaried employees and leaves gig and blue-collar workers behind.

Key Provisions of the RSAA Include:

• Eligibility and Auto-Enrollment: Workers without access to employer-sponsored plans — including gig workers — would be automatically enrolled at a 3% contribution rate, with the option to adjust or opt out.
• Federal Contributions: Eligible low- and moderate-income workers would receive a 1% automatic federal contribution and up to a 4% match, delivered through a refundable tax credit. This benefit phases out near the median income level.
• Portability: Retirement accounts would follow workers across jobs and throughout their careers, allowing flexible contributions.
• Private Ownership: Account assets would remain the property of individual workers and could be inherited, aiding long-term wealth building.
• Investment Options: Participants would choose from simple, low-fee investment options similar to the Thrift Savings Plan, including target-date and index funds.

Support for the bill spans both public and private sectors.

John Lettieri, President and CEO of the Economic Innovation Group, called the bill “a healthier retirement system, a more financially secure workforce, and a stronger economy for all Americans.”

Bill Sweeney, AARP’s Senior Vice President of Government Affairs, emphasized the need for broader access. “Nearly half of all private-sector employees do not have access to an employer-sponsored retirement savings program,” Sweeney said.

Charles Schwab, founder of the Charles Schwab Corporation, also voiced strong support. “It isn’t a giveaway, but an incentive for working individuals to begin helping themselves and their families,” he said.

Leaders in the gig economy are backing the bill as well. DoorDash’s Max Rettig praised the RSAA as a way to support “Dashers and other Americans who are choosing new and different ways to work.” Javi Correoso, Head of Federal Affairs at Uber, described the bill as “a novel, thoughtful approach to bridging gaps in the existing retirement savings framework.”

As lawmakers push forward, the RSAA reflects a rare moment of bipartisan agreement on one of the country’s most urgent financial issues — how to help millions of workers retire with security and dignity.

The full text of the RSAA may be found HERE.