North Charlotte Today

WASHINGTON, D.C. - Senators Thom Tillis and John Hickenlooper, alongside Representatives Lloyd Smucker and Terri Sewell, have recently introduced the Retirement Savings for Americans Act (RSAA). This bipartisan legislation aims to assist low- and middle-income Americans in building wealth and saving for retirement.

One of the key issues addressed by the bill is the lack of access to employer-sponsored retirement plans for approximately 40 million Americans. Senator Tillis highlights this problem, stating, "Roughly 40 million Americans lack access to an employer-sponsored retirement plan, which represents a significant roadblock to achieving financial security for their retirement." The RSAA aims to provide a solution by establishing a pathway for savings for individuals who currently lack retirement options.

The Retirement Savings for Americans Act encompasses several provisions designed to help workers save for retirement. One key provision is eligibility and auto enrollment. Full- and part-time workers who do not have access to an employer-sponsored retirement plan would be eligible for an account and automatically enrolled at 3% of their income. Workers would have the flexibility to adjust their withholding or opt-out at any time. Additionally, independent workers, including gig workers, would also be eligible for these accounts.

Another significant provision of the RSAA is the federal contribution. Low- and moderate-income workers would be eligible for a 1% automatic contribution, as long as they remain employed, and could receive up to a 4% matching contribution through a refundable federal tax credit. This contribution would phase out at median income levels.

The bill also emphasizes the portability of the accounts. Accounts would stay attached to workers throughout their lifetimes, allowing individuals to start and stop contributions as they see fit. Furthermore, the accounts would be the property of the worker, and the assets could be passed down to future generations, promoting the accumulation of wealth and financial security.

To provide investment options, the Retirement Savings for Americans Act proposes a menu of simple, low-fee investment options, similar to the current Thrift Savings Plan. Participants would have the choice of lifecycle funds tied to their estimated retirement date or index funds consisting of stocks and bonds.

The introduction of the Retirement Savings for Americans Act has received support from various individuals and organizations. Charles Schwab and others have expressed their endorsement of the legislation.

The Retirement Savings for Americans Act is a significant step towards helping low- and middle-income Americans save for retirement. With its provisions for eligibility, federal contributions, portability, private assets, and investment options, the bill aims to provide a pathway to financial security in retirement for millions of Americans.

For more information on the bill, you can view a one-page explainer and the full text of the bill on the provided links.

Sources:

- Senator Thom Tillis

- Charles Schwab

To learn more, click on this link: https://www.tillis.senate.gov/2023/10/tillis-colleagues-reintroduce-bipartisan-legislation-to-help-americans-save-for-retirement