The retirement system isn’t meeting today’s needs, let alone tomorrow’s. Concerns about the long-term stability of Social Security have shaken public confidence, and for many workers, personal savings options are limited or out of reach.
Congress has a real chance to fix our fractured retirement system in the new tax bill. But using retirement policy to offset tax cuts would be a mistake. Tax incentives for saving may cost money upfront, but they’re one of the few parts of the system that actually work. The real problem isn’t that too many people get a break for saving – it’s that too few can save at all.
Make saving easier
There’s broad agreement that our retirement system has blind spots. A full-time worker at a large company with a 401(k) and matching contributions is in decent shape.
But that’s not the norm. Tens of millions of workers, especially those employed by small businesses or working in part-time or gig roles, have no plan at all. And while legislation like the SECURE 2.0 Act has taken important steps to expand access, many people are still being left behind.
SECURE 2.0 does offer tax credits to help small businesses start retirement plans, but many still hold back due to legal and administrative hurdles. A better solution is to let employers offer payroll deduction IRAs without triggering complex rules. Removing that red tape would make it easier to help workers save, and more businesses would step up.
At the same time, Congress should streamline and strengthen automatic savings options. Currently, some states require employers to enroll workers in IRA programs, while others do not. This patchwork creates confusion and uneven access. A federal auto-IRA program would bring consistency and make retirement saving the default for millions of workers.
Another overlooked issue is what happens when workers change jobs. If they have small balances in their retirement accounts, usually under $7,000, the money often rolls into low-yield IRAs that barely keep up with inflation. Many just cash out, undermining long-term savings. Congress can fix this by allowing those accounts to be invested in higher-return options, a simple change that would make a big difference.
Make it better for independent workers
Independent workers face an even tougher path to retirement security. While options like solo 401(k)s and SEP IRAs exist, they’re complex and lack the support traditional employees get. Congress should let gig workers join Pooled Employer Plans, giving them access to lower costs, professional management, and a real chance to save on their own terms.
Modernizing retirement rules should also reflect how people actually live and age. Required minimum distributions, or RMDs, currently force retirees to start drawing down their accounts at age 73 — even if they don’t need the money. For retirees with modest balances, this can interfere with careful planning. Congress should consider waiving RMDs for smaller accounts, letting people manage withdrawals based on their own financial situation, not arbitrary timelines.
We should also think about how to build stronger saving habits from the very beginning. Currently, only people with earned income can contribute to Roth IRAs. That shuts out children, students, and others who could benefit enormously from starting early. A “Child IRA” structure, where parents can contribute modest amounts on behalf of their children, could encourage lifelong saving.
Through all of this, Congress must protect the tax incentives that drive retirement saving in the first place. These incentives aren’t giveaways to the wealthy, they’re the single biggest reason many Americans contribute to retirement plans at all.
Weakening or eliminating them would reduce participation and leave more people unprepared for retirement. That’s a step backward at exactly the moment we should be moving forward.
Make a system for everyone
The U.S. retirement system has made progress, but it’s far from the place it must be. The real task now is not to dismantle what works, but to make saving easier, expanding access to everyone, modernizing outdated rules and ensuring the system reflects how Americans work and live today.
Congress has an opportunity to build a retirement system that actually works for everyone. That’s a goal the country can’t afford to miss.
Peter J. de Silva, author of “Taking Stock: 10 Life and Leadership Principles from My Seat at the Table” and a senior fellow of Harvard University’s Advanced Leadership Initiative, is CEO of Pittsburgh-based IRALOGIX.