At a solutions forum held at the National Press Club in Washington, D.C., Debra Whitman, AARP executive vice president for Policy, Strategy and International Affairs, said, “Unless we reverse current trends, the majority of Americans will face a grim future in retirement. That is why we are calling today for expanding access for workers to save for retirement and for improving the tax incentives that help encourage them to save.”
Randy Johnson, the U.S. Chamber’s senior vice president of Labor, Immigration and Employee Benefits, added, “With the unprecedented growth in the number of Americans who are at or near retirement age, it is clear that an emphasis on increasing retirement savings will not only contribute to individual retirement security but also to America’s economic security.”
The groups urged action to:
- Expand access for workers to tax-deferred payroll deduction retirement saving plans at their place of work, while recognizing and minimizing any additional burden these plans place on employers. Payroll deduction retirement saving, especially when combined with automatic enrollment and automatic escalation, has proven to be the most efficient and effective method to increase participation and retirement savings.
- Keep and enhance incentives to save for individuals at all income levels while targeting in particular those low- and moderate-income earners who have fewer opportunities and resources to save. Increasing private retirement saving is critical to both overall economic growth and to the future income security of millions of Americans.
- Increase education efforts regarding the need for working Americans to save sufficient amounts for retirement and how to most effectively do so. Many Americans with the ability to set money aside simply do not save or save far less than they should. Improved and sustained educational efforts can help address that challenge.
Lawmakers have made proposals to change the tax treatment of retirement savings as well as cap the amount of savings individuals can accumulate. Industry groups have urged caution against these efforts (see “ERIC Urges Caution on Tax Treatment of Retirement Plans”).