Terri Sewell introduces bipartisan retirement savings bill

Representatives Terri Sewell (AL-07), Lloyd Smucker (PA-11), U.S. Senators John Hickenlooper (D-CO) and Thom Tillis (R-NC) have introduced a bill that seeks to help low and middle income Americans save for retirement. 

If passed the Retirement Savings for Americans Act (RSAA) would create a program that allows those eligible to access "portable, tax-advantaged" retirement savings accounts and would have the federal government match their contributions that would phase out at median income. 

“Every Alabamian and every American should be able to retire with dignity after a lifetime of work,” said Sewell in an announcement. “Democrats and Republicans alike recognize the urgent need for Congress to address the gaps in our retirement system and make it easier for low- and middle-income workers to save for retirement."

"I am proud to once again work with my House and Senate colleagues on both sides of the aisle to advance the Retirement Savings for Americans Act which would level the playing field for working families and build a stronger economy for all Americans.”

 Specifically the bill would do the following as detailed by Sewell's announcement: 

• Eligibility and Auto Enrollment: Full- and part-time workers who lack access to an employer-sponsored retirement plan would be eligible for an account, and they would be automatically enrolled at 3% of their income. They could choose to increase or decrease their withholding, or opt out entirely at any time. Independent workers (including gig workers) would also be eligible.
• Federal Contribution: Low- and moderate-income workers would be eligible for a 1% automatic contribution (as long as they remain employed) and up to a 4% matching contribution via a refundable federal tax credit. This would begin to phase out at median income.
• Portability: Accounts would remain attached to workers throughout their lifetimes, and workers would be able to stop and start contributions at will.
• Private Assets: The accounts would be the property of the worker and the assets could be passed down to future generations to help them build wealth and financial security.
• Investment Options: Much like the current Thrift Savings Plan, participants would be given a menu of simple, low-fee investment options to choose from, including lifecycle funds tied to a worker’s estimated retirement date, or index funds made of stocks and bonds.

Sewell cited data from the National Council on Aging that reportedly found that 80% of senior Americans are unable to retire due to financial insecurity, especially gig and blue collar workers.