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A boost for Americans’ retirement funds

Millions of Americans are on course either to lack the financial ability to retire or to experience a significant drop in income when they are no longer able to work.

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As our nation continues to build back from the devastation of the COVID-19 pandemic, Congress should address a key issue that will strengthen Americans’ financial security and resiliency: retirement policy.

There’s a retirement crisis in the United States that began long before the pandemic upended our economy. Millions of Americans are on course either to lack the financial ability to retire or to experience a significant drop in income when they are no longer able to work. In fact, roughly half of working-age US households are at risk of being unable to maintain their pre-retirement standard of living in retirement, and 31 percent of workers have no retirement savings at all.


Addressing this issue is a matter of equity, too. Latino, Asian, and Black populations are less likely to have access to work-sponsored retirement plans than white Americans. These sorts of disparities lead to inequitable outcomes. For example, according to a 2017 Urban Institute analysis, on average, Black and Latino families in the United States had only about one-sixth the liquid retirement savings of white families.

After a lifetime of hard work, Americans in their old age shouldn’t have to wonder how they’ll afford to put food on the table, pay for health care, or keep a roof over their heads.

This week the House passed legislation to make it easier for more Americans to save for a financially secure retirement and have peace of mind in their later years. The Securing a Strong Retirement Act of 2022 is bipartisan US House Ways and Means legislation that will go a long way toward improving workers’ long-term financial well-being.

This bill expands automatic enrollment in 401(k) plans by requiring these plans to enroll participants automatically upon becoming eligible, with the ability for employees to opt out of coverage. Expansion of automatic enrollment will significantly increase participation in retirement savings at work.


The legislation enhances the start-up credit for small businesses, covering administrative costs for new plan implementation and making it easier for them to sponsor a retirement plan. Other provisions in the bill include increasing the age at which you are required to start withdrawing from your retirement account to 75 as well as indexing the catch-up contribution limit for retirement accounts, which allows people aged 50 or older to make additional contributions to their accounts. These changes will make it easier for American families to prepare for a financially secure retirement.

The bill also includes key protections for savers — it safeguards retirees who unknowingly receive retirement plan overpayments, and it creates a national online searchable Retirement Savings Lost and Found Database at the Department of Labor for workers and retirees to find their lost retirement accounts.

Many refer to this legislation as “SECURE Act 2.0″ because it builds on the bipartisan Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was signed into law at the end of 2019. That bill laid a strong foundation for the work we’re continuing this week. It gave 4 million more Americans the opportunity to save for retirement through their employers, and as a result, an estimated 600,000 to 700,000 new retirement accounts will be formed.

The Ways and Means Committee’s work in the retirement space is an increasingly rare example of members crossing party lines to achieve substantial policy progress for the American people. This effort will vastly improve the financial security of workers in the Commonwealth and across the nation.


Richard E. Neal is chair of the US House Committee on Ways and Means.