For those familiar with the advocacy group for older Americans, it will come as no surprise that AARP has an interest in any serious federal law or policy proposal that might impact older Americans in their retirement years.
The organization makes it a mission to fight on behalf of Americans over 50 on a number of federal health and fiscal issues such as Medicare and Social Security.
AARP also raises awareness about 401(k) plans and Individual Retirement Accounts (IRAs) that help American workers save and invest for their post-career lives.
Related: AARP sends strong message on new Social Security income change
“AARP has long supported increased access to retirement plans, including pensions and 401(k)s, which help older adults feel financially secure and live independently,” AARP wrote. “Fifty-six million workers lack access to such plans through their employers, according to AARP research, especially small-business employees, low-income employees and workers of color.”
During his State of the Union address on Feb. 24, President Donald Trump mentioned a new kind of retirement account — and AARP was paying close attention.
“Though he revealed few details, he said the new retirement accounts — which would be separate from Social Security — could add to existing options that help people prepare for life after leaving the workforce,” AARP wrote.
The government would contribute matching funds of up to $1,000 each year to workers’ deposits, according to Trump’s remarks. The accounts could function much like the Thrift Savings Plan used by federal employees and military personnel, which includes a federal matching component, AARP suggested.
“The Thrift Savings Plan (TSP) is a defined contribution retirement savings and investment plan that offers Federal employees the same type of savings and tax benefits that many private corporations offer their employees under 401(k) plans,” wrote the U.S. Office of Personnel Management.
“By participating in the TSP, Federal employees and uniformed service members can save part of their income for retirement, receive matching agency contributions, and reduce their current taxes.”
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AARP explains where 401(k) plan access falls short
- About 78% of businesses with fewer than 10 employees do not offer any employer‑sponsored retirement plan.
- Nearly 80% of workers who lack access to a workplace retirement plan earn under $53,000 per year.
- Access gaps are significant among non‑white workers: Roughly 63% of Hispanic employees, 52% of Black employees, and 44% of Asian American employees do not have a retirement plan available through their employer.
(Source:AARP)
AARP supports proposed retirement savings legislation
AARP has thrown its support behind several federal proposals aimed at closing the retirement‑savings gap, including the bipartisan Retirement Savings for Americans Act and the Automatic IRA Act.
Both measures are designed to strengthen workers’ long‑term financial security.
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In his 2024 endorsement letter for the Retirement Savings for Americans Act, AARP senior vice president of government affairs Bill Sweeney pointed out that nearly half of private‑sector employees still lack access to any employer‑sponsored retirement plan.
“AARP has always supported bipartisan policy that helps more people save, and we look forward to seeing details as plans and proposals move forward,” Sweeney said.
“We know that Americans are much more likely to save when they have access to retirement savings options at work,” he added.
House Ways and Means Committee outlines Automatic IRA Act
The Automatic IRA Act of 2025 is designed to bring millions of uncovered workers into the retirement system by requiring many employers to automatically enroll employees in IRAs or similar savings arrangements, according to Democrats on the House Ways and Means Committee. The legislation has these goals:
- Expands retirement coverage to employees, gig workers, and independent contractors who currently lack access to a workplace plan.
- Strengthens and complements the existing private pension system rather than replacing employer‑sponsored plans.
- Builds on state‑run automatic IRA programs, which have shown that auto‑enrollment increases participation and helps narrow racial, ethnic, gender, and income‑based savings gaps.
- Reinforces the broader retirement system by encouraging more employers to adopt 401(k)‑type plans as state auto‑IRA programs have already demonstrated.
- Addresses the voluntary nature of current federal retirement rules, where employers are not required to offer a plan and employees often must opt in to contribute.
- Recognizes the shift toward automatic enrollment, where contributions are deducted unless a worker actively opts out, as an effective way to boost savings.
- Requires employers with more than 10 employees who do not sponsor a retirement plan to automatically enroll their workers in an IRA or another automatic contribution arrangement.
- Minimizes cost burdens for small employers by allowing them to use existing startup tax credits or a proposed $500, three‑year tax credit for adopting automatic IRAs.
(Source:House Ways and Means Committee Democrats)
Related: AARP, SSA warn retirees about new benefit reductions
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