We are calling on Congress to empower low- and middle-income Americans to build wealth by providing access to a new retirement savings program modeled after the federal Thrift Savings Plan.
Our Solution
Research shows that the right incentives can play a crucial role in helping people achieve their financial goals and attain self-sufficiency. The TSP is a proven 401(k)-like program that draws from important findings in behavioral economics to deliver outstanding results for eligible workers–including those with low income and educational attainment.
Key features of TSP include automatic enrollment for eligible workers, low fees, simple plan options, and federal matching contributions to reward and encourage savings.
That’s why it is an ideal model for a new program designed to target workers who don’t have access to a retirement plan through their employers, thereby filling the gap in the current retirement system that is leaving tens of millions of American workers behind.
Helping hardworking Americans build wealth shouldn’t be a partisan issue. It’s time for Congress to work together to ensure that everyone has access to a retirement savings account like the TSP.
Under our proposed savings and investment plan, workers in the bottom income quartile could accumulate median wealth of more than $43,000 within 10 years by contributing 5 percent of their wages. A 25-year-old worker in the bottom income quartile could accumulate more than $600,000 by retirement.
What the Experts are Saying
“The Retirement Savings for Americans Act would provide millions of hard-working Americans with a direct stake in the growth and prosperity of our economy. This legislation represents a unique opportunity to fix major shortcomings in the U.S. retirement system and build bottom-up wealth in a manner that rewards work and strengthens faith in the basic fairness of our economic system.”
Kevin Hassett
Distinguished Visiting Fellow
Hoover Institution, and Former Chair of the White House Council of Economic Advisors
“Too many Americans are struggling to meet their savings goals and secure a comfortable standard of living in retirement. The Retirement Savings for Americans Act takes critical steps to address gaps in federal retirement policy and ensure that low- and moderate-income workers are equipped to build a nest egg for themselves and for future generations.”
Teresa Ghilarducci
Professor
Schwartz Professor of Economics and Policy Analysis, New School for Social Research
“Far too many Americans are unprepared for retirement. The Retirement Savings for Americans Act would tackle serious gaps in the U.S. retirement system that have hindered millions of workers from saving for a more certain and secure future. By incorporating a range of proven features, this innovative legislation would greatly expand market access to high quality retirement plans and target savings incentives to workers who need them most. The result would be a healthier retirement system, a more secure workforce, and a stronger economy to the benefit of all Americans. EIG is proud to have worked closely with Senators Hickenlooper and Tillis and Representatives Sewell and Smucker on this important legislation, and we applaud them for their bipartisan dedication to empowering American workers.”
John Lettieri
President & CEO
Economic Innovation Group
“The path towards helping families achieve financial security through retirement savings requires innovative policy ideas that are pragmatic and harness the efficacy of existing models and administrative infrastructure to enable participation. SBE Council congratulates the bipartisan group of members for developing and introducing the Retirement Savings for Americans Act, which offers a unique approach and framework for providing workers who currently lack access with an employer sponsored retirement account. As the legislation makes its way through Congress, we look forward to working with the sponsors and other members to bring additional feedback from entrepreneurs and small business owners about the approach. As the bipartisan working group on the bill has shown, collaborative policy development can move the needle on resolving critical issues such as helping many more families and individuals attain financial security.”
Karen Kerrigan
President & CEO
Small Business & Entrepreneurship Council
“We applaud Senators Hickenlooper and Tillis and Reps. Sewell and Smucker for continuing to elevate the conversation around retirement savings—and for yet again proving this is a bipartisan issue. This bill serves as another innovative proposal that would ensure millions more Americans have the opportunity to get on the path to retirement security and provide them support along the way by dramatically expanding workplace retirement plan coverage.”
Michele Stockwell
Executive Director
BPC Action
“In 2019, the Federal Reserve found that for the bottom 50 percent of American families—that is half of the country—the median retirement account savings balance is $0. So, what if there is an elegant solution to this massive problem, and what if that solution already exists? Today we are going to explore the retirement gap, and a possible fix that could be staring us right in the face.”
Meghna Chakrabarti
NPR
The US Conference of Mayors adopted a bipartisan resolution in 2023 calling on Congress to strengthen retirement security for low- and middle-income workers, and specifically urging that they “consider establishing a TSP-type program for workers who lack access to an employer-sponsored retirement plan, including matching federal incentives to low- and middle-income workers, as a way to promote asset ownership and retirement security, reward work and savings, and improve the well-being of millions of hard-working Americans.”
U.S. Conference of Mayors
The Stats
TSP participation rates jumped by at least 20 percentage points with a government match for: eligible Black workers, those with at most a high school education, and those in the bottom one-third of earnings (according to a Congressional Budget Office Report).
Stay Informed
The Inclusive Wealth Building Initiative is a project of the Economic Innovation Group.
The Economic Innovation Group (EIG) is an ideas laboratory and advocacy organization whose mission is to advance solutions that empower entrepreneurs and investors to forge a more dynamic American economy.
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