The National Institute on Retirement Security (NIRS) released a statement today applauding the SECURE 2.0 Act of 2022 that is expected to require auto-enrollment in new retirement plans, make the Saver’s Credit more accessible for low- and middle-income workers, improve access to retirement plans for part-time workers, and allow older workers to save more.
“While this legislation will make significant progress, more work will be required to make retirement security a user-friendly proposition for all workers.”
NIRS Executive Director Dan Doonan
Adding that while the retirement reform legislation that is expected to pass this week as part of the 2023 omnibus appropriations bill is a clear sign that Congress understands the urgent need to shore up the nation’s retirement infrastructure, NIRS said more needs to be done to help low- and middle-income workers who lack access to a retirement plan at work.
“It’s encouraging that lawmakers are continuing to give retirement policy the attention it needs. We’re pleased to see provisions in SECURE 2.0 that will improve access to retirement programs and help more workers set aside savings. Far too many Americans face a frightening retirement shortfall,” said Dan Doonan, NIRS executive director.
“There remains an urgent need to fix the gaping hole of about 57 million workers who lack access to a retirement plan at work. While this legislation will make significant progress, more work will be required to make retirement security a user-friendly proposition for all workers,” Doonan continued. “Typically, low- and middle-income workers struggle the most. These workers often have no access to workplace retirement programs, are unlikely to save on their own, and benefit little from tax incentives that promote retirement savings. These are the Americans who should be our top priority, not high-income earners already on track for a secure retirement.”
Recent NIRS research, The Missing Middle: How Tax Incentives for Retirement Savings Leave Middle-Class Families Behind, documents how retirement policies fail to promote adequate retirement security for the middle class. The report also highlights the important role that the Saver’s Credit could play in encouraging savings. The Washington, DC-based non-profit, non-partisan organization said it is a positive development that the Saver’s Credit will be reworked, made refundable, and will permit funds to be deposited into retirement accounts like a workplace match.
Congressional efforts to empower employers to help younger workers save for retirement via the SECURE legislation is significant, the NIRS statement continued. “Over the long-term, retirement is far more efficient when younger workers are saving early in their career and at higher levels.”
NIRS research also finds that the burden of preparing for retirement is increasing as workers face more risk and rising costs. Escalating housing, healthcare, and long-term care costs in retirement are creating retirement obstacles for Americans. Meanwhile, the shift from pensions to 401k plans has pushed more retirement risk onto workers.
SEE ALSO:
• It’s In! SECURE 2.0 Act of 2022 Included in Omnibus Appropriations Bill
• Retirement Savings Tax Breaks Disproportionately Benefit Wealthy