Securing retirement in America

The Retirement Bill of Rights provides the blueprint for solving the core challenges to retirement security

In October 2023, Angela Antonelli of Georgetown’s Center for Retirement Initiatives sat on a panel in front of a group of nearly 100 policymakers, economists and retirement plan professionals and began with a statement that not long ago might have been dismissed as absurd or even heretical. Instead, many in the audience nodded in agreement.

“When ERISA  was created 50 years ago, 401(k) plans were meant to be a supplement to DB (defined benefit) plans. The unintended consequence was to make it easier for employers to abandon providing the benefit of income in retirement. This made an existing problem even worse, as employers have never been required to even offer a retirement plan to their workers. Half of the private sector doesn’t even have access to a retirement plan so they aren’t saving. And we also have people who do have access to a plan who don’t save or aren’t saving enough.”

55 million Americans don’t have access to a retirement plan at work

Plenty of data backs up Antonelli’s statements. Over 55 million American workers lack access to a retirement plan, particularly black and Hispanic Americans and those working for small businesses. Women retire with less savings than men but live an average of two years longer, setting the stage for a savings shortfall without some form of guaranteed lifetime income. “If there’s one thing that I wish working Americans knew, it’s whether or not their retirement plan offers an option for guaranteed lifetime income,” shared Barbara Delaney of HUB International . “The one downside to automatic enrollment is that many participants assume lifetime income is a given in their retirement plan when in reality it is not.”

“We face big challenges when it comes to ensuring a dignified retirement for American workers,” says Brendan McCarthy, Head of Retirement Investing at Nuveen. “Working together toward a common goal and purpose, we can make more progress than any of us could achieve as individuals. That’s the purpose of the Retirement Bill of Rights .”

What’s in the Retirement Bill of Rights?

The Retirement Bill of Rights (RBOR) lays out the fundamental challenges in the U.S. retirement system: Not enough people have access to a retirement plan. For those with access, they are:

• Not participating in the plan
• Not contributing enough to the plan to make ends meet in retirement
• Not finding a way to create income guaranteed to last throughout retirement.

Given the current state of the retirement industry, the RBOR also identifies a role for everyone to be part of the solution—policymakers, employers and advisors.

Nuveen’s parent company, TIAA, introduced Retirement the Bill of Rights in March 2023, shortly after the passage of the SECURE 2.0 Act in December 2022. At the time, many plan sponsors found themselves drinking from a firehose of reforms enacted by the new legislation and the original SECURE Act of 2019. Many found themselves struggling to decide how and when to make the right plan design changes. “The Retirement Bill of Rights tees up a strategic discussion. It’s an opportunity to ask plan sponsors, ‘What’s critical to helping employees achieve their goals for retirement?’” McCarthy suggested. 

“The Retirement Bill of Rights is a feeling of inalienable rights,” said Philip Chao, founder and chief investment officer, of Experiential Wealth, Inc. , an advisory firm. “It’s very empowering, but it takes a village to make it happen. It offers us the opportunity, but it also challenges us to make sure that we fulfill that promise. This is not just some logo or a throwaway line, but a commitment from the individuals involved as well as the solutions being generated.”

Retirement Bill of Rights

1. Every worker in America has the right to save for and achieve a financially secure retirement.
2. Every worker should have access to low-cost investment options that help provide ample income for a dignified retirement.
3. Every worker deserves clear information that allows them to compare saving and income options, make informed choices, and meet their retirement goals.
4. The public and private sectors share responsibility for helping every worker access retirement income that will last the rest of their lives.

What can advisors do?

The Retirement Bill of Rights lays out the fundamental challenges in the U.S. retirement system: Not enough people have access to a retirement plan. Even if they do, they are not maximizing the plan’s potential.

In many respects, the Retirement Bill of Rights sums up the mission for many advisors. Since its release less than a year ago, more and more advisors are using the Retirement Bill of Rights to open a meeting with plan sponsors and set the stage for a strategic conversation about goals, purpose and ensuring dignified retirements. “While the product is an extremely important part of the solution, we in the retirement industry need to develop a lifetime income implementation process that guides people as they work toward retirement,” Delaney said.

This taps into an advisor’s role as an educator to start to shift the language from retirement savings to retirement income. “Whether we’re talking with lawmakers, with individuals and everyone in between, all of us drive the change we need. And education will help us get there,” McCarthy said.

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