The NCSL Blog


By Anna Petrini

A new report from the National Institute on Retirement Security (NIRS) paints an astonishing picture of retirement unreadiness in America, despite the economic recovery.

Broken piggy bank with band-aids.The NIRS analysis of U.S. Census Bureau data reveals that the median retirement account balance among all working individuals is $0. The data also indicates that 57 percent of working-age individuals do not own any retirement account assets in an employer-sponsored 401(k)-type plan, individual account or pension. That’s more than 100 million Americans without retirement savings.

“When all working individuals are considered—not just the minority with retirement accounts—the typical working American has zero, zilch, nothing saved for retirement,” says Diane Oakley, report author and NIRS executive director. Overall, four out of five working Americans have less than one year’s income saved in retirement accounts, according to the report.

Critics have cited other research to suggest the risk of widespread financial insecurity in retirement, while troubling, is not quite as bad as all that. Regardless of the metrics used to quantify risk, there is broad consensus that Americans are justifiably anxious about their retirement prospects, despite a booming economy.

Federal, state and local policymakers have been grappling with ways to expand access to retirement savings vehicles and help more Americans take advantage of options the financial services sector already provides and continues to develop.

Among the policy prescriptions proffered in the NIRS report to aid low and moderate-income workers are strengthening Social Security, expanding access to low-cost, workplace retirement plans and expanding the Saver’s Credit.

While Social Security remains an important foundation, it was never intended to serve as a retiree’s sole source of retirement income. With a dwindling number of private sector workers able to rely on defined benefit pensions, the responsibility to supplement Social Security now falls on individuals, usually through employer-sponsored defined contribution accounts such as 401(k)s or individual retirement accounts.

States have led the way in developing policies to enhance on-the-job retirement savings. Since 2012, 40 states have studied proposals for state-facilitated retirement savings programs or considered or adopted legislation to create them. Ten states have now enacted legislation to expand access to workplace retirement savings for non-governmental workers. Enrollment in programs adopted by Oregon and Washington is already well underway, and the rollout of California’s CalSavers pilot and the first wave of Illinois’ Secure Choice are imminent.

Several efforts to expand retirement plan coverage have failed to gain traction at the congressional level, though momentum behind a bipartisan package of proposals appears to be growing.

Meanwhile, on Aug. 31, President Donald Trump signed an executive order calling on the Department of Labor to consider the pros and cons of allowing small businesses to jointly offer retirement plans through arrangements known as open Multiple Employer Plans.

Policymakers at all levels of government acknowledge that changing the retirement fortunes of millions of vulnerable Americans will depend on imaginative thinking, leadership from the public and private sectors and bipartisan cooperation.

Check out NCSL resources on retirement security.

Anna Petrini is a policy specialist in NCSL’s Employment, Labor and Retirement Program.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.