Concerns about retirement savings are rising among Americans, with a significant portion of the population questioning the adequacy of the current system.
Newsweek reports that a recent survey by BlackRock shows overwhelming support for more legislative action, with 80 percent of respondents urging both the Trump administration and Congress to focus on policies that could help individuals save for their later years.
The Challenges Facing Today’s Workers
The BlackRock study, which surveyed 1,000 registered voters between January 11 and January 15, found that only 28 percent of Americans feel the current retirement system offers the necessary resources to build a secure future.
Moreover, just 18 percent expressed confidence in having enough funds to sustain them throughout retirement. Worries about running out of money in retirement outweigh fears about death for 51 percent of respondents.
Many workers are facing disruptions in the economy, a tenuous employment market, and the high cost of living. The study also noted that many workers are still recovering from the financial impacts of the COVID-19 pandemic.
Legislation in Focus : SECURE Acts
The SECURE Act of 2019 and the SECURE 2.0 Act of 2022 were designed to address these concerns by offering more tools for retirement savings. Among the key provisions are raising the Required Minimum Distribution (RMD) age to 73, expanding eligibility for part-time workers, and providing penalty-free emergency withdrawals of up to $1,000 annually. These changes were a step toward supporting Americans in preparing for retirement, but significant gaps remain.
Small Businesses and the Role of Employers
A significant portion of the U.S. workforce—50 percent—is employed by small businesses. Scott Buffington, from Paychex, argues that small employers should be incentivized to offer retirement plans to their employees. Buffington emphasized,
The government should continue to make it easier for small businesses to offer a payroll-deductible retirement plan solution. Studies have shown that most people do not save for retirement outside of a workplace plan, and most small businesses are still not offering their employees a plan.
The Retirement Investment in Small Employers (RISE) Act is a bipartisan bill that would allow businesses with 1-9 employees to receive full retirement plan startup tax credits—a benefit originally offered in SECURE Act 2.0.
It’s critical to motivate small employers to offer something – Buffington said,
stressing the need for these businesses to have similar incentives to those offered to larger companies.
Looking Beyond the U.S.: International Models
Experts also point to other countries for inspiration. In Australia, retirement contributions are mandatory for employees, with an opt-out option, a policy that has led to a substantial accumulation of savings. Carson McLean, founder of Altruist Wealth Management, explained,
Australia mandates employee retirement contributions with opt-out flexibility. This small behavioral shift—making saving the default—has had a profound effect. Australians now hold over $150,000 AUD per capita in retirement savings.
McLean further commented on the shift from traditional pensions to 401(k)s, saying,
When pensions gave way to 401(k)s, we shifted a complex burden onto individual workers. Many never enroll. Others under-contribute or remain in low-growth options for years. Auto-enrollment and default investments have helped, but they only matter if people are actually contributing.
