Alice Joe
Former Vice President, Center for Capital Markets Competitiveness


March 13, 2017


Axios recently noted this demographic fact: The largest age cohort in the U.S. is 26-year olds.

While the rise of the Millennial generation has drawn much discussion in business, politics, and culture, it misses the on-going demographic change underway in the U.S.

America is getting older.

“The number of Americans ages 65 and older is projected to more than double from 46 million today to over 98 million by 2060,” finds the Population Reference Bureau. “And the 65-and-older age group’s share of the total population will rise to nearly 24 percent from 15 percent.”

Americans are living longer and Social Security and Medicare on less-than-sound footing, retirement savings is more important than ever.

Unfortunately, many Americans aren’t saving enough.

Bloomberg reports that while “79 percent of Americans work at places that sponsor a 401(k)-style plan,” only about a third are using them.

We need policies that encourage more Americans to save more for retirement.  However, there are ideas out there that could have the exact opposite effect.

One bad idea is some states want to run their own retirement savings programs but want an exemption from the protections of the Employee Retirement Income Security Act (ERISA) and be treated differently from employer-provided plans.  Another is the Obama administration’s Fiduciary Rule that would reduce retirement savings options and limit the human advice many savers want.

In the alternative there are several things that Congress and the White House can do to get Americans to save more for retirement:

  • Make it easier for small businesses to offer retirement plans for their workers by implementing open Multiple Employer Plans.  MEPs are a simple way to let small businesses “join” a plan rather than having to offer one all by themselves.  This lets them access professionally managed plans with good benefits and features for lower costs and with fewer responsibilities.
  • Encourage small businesses to implement retirement plans by expanding the small business tax credit for employer-plan startup costs by broadening it and making it refundable.
  • Remove burdens of offering retirement plans by simplifying compliance testing and streamlining notice requirements.
  • Assist workers with saving for their retirement by encouraging financial literacy and retirement education.

The U.S. Chamber crafted a legislative roadmap to get where we need to go.  The roadmap includes details on the suggestions above as well as other recommendations to strengthen the private retirement system.

As we live longer, a secure retirement will be more important. We need policies from Washington to ensure that Americans have opportunities to do that.

About the authors

Alice Joe