The Retirement Savings for Americans Act (RSAA) aims to provide retirement savings plans for the more than 60 million Americans who lack access to employer-sponsored plans. The authors describe various behavioral scenarios that explore key sources of uncertainty. Low-income RSAA participants could see substantial increased savings in retirement. Cost estimates vary by behavioral assumptions, including whether firms drop existing retirement plans.

Impacts of the Retirement Savings for Americans Act

A Preliminary Analysis Using the RAND Budget Model

Carter C. Price, Jeffrey B. Wenger, Philip Armour, Matthew B. Forbes, Hsin Sheng Ma

ResearchPublished Aug 12, 2025

The United States is experiencing an increase in the number of retirees, a significant retirement shortfall, an increase in poverty among people older than 65, and an increased strain on the Social Security program’s finances. In an effort to face these challenges, lawmakers have proposed the Retirement Savings for Americans Act (RSAA) to provide retirement savings plans for the more than 60 million Americans who lack access to employer-sponsored plans. These RSAA accounts would include automatic enrollment and, for those with less than median income, a contribution equivalent to 1 percent of a worker’s annual income from the federal government, plus as much as a 4-percent government match for participants who save 5 percent of their post-tax income

To model the implications of the RSAA plans, the authors developed a model to simulate the outcomes of full participation and then assessed and tested a variety of plausible unemployment rates based on a review of the literature and the researchers’ own data collection. The model also considers longer time horizons, allows for dynamic scoring, and explores alternative scenarios. Some of the dynamic considerations include changes in labor supply, either in labor force participation or a change in hours of work; crowding out (i.e., firms changing their willingness to offer employer-sponsored plans once the federal account plan is available); and retirement percentage savings adjustments.

Key Findings

Workers without employer-sponsored retirement plans in the status quo can be expected to have substantially higher retirement assets with an RSAA account

  • About 42 million of the estimated 63 million workers without an employer-sponsored retirement account would be eligible to receive federal matching funds for an RSAA account.
  • In practice, an RSAA account would offer more benefits to younger workers because they are more likely to earn below the median annual earnings.
  • As workers age, they are more likely to earn above median annual earnings, meaning their federal matching contributions would phase out.
  • Under the model’s optimistic scenario, an RSAA account would enable the lowest earners (those who consistently earn in the bottom 10 percent of the earnings distribution) to save approximately $126,000 over a 40-year working career.
  • Additionally, older workers are more likely to work for employers that offer retirement plans, meaning they would transition off the plan.
  • The RSAA could reduce state and federal government spending on asset-tested programs, such as Medicaid and Supplemental Security Income (SSI) for seniors, by more than the program costs on an annual basis after 20 to 30 years, depending on the behavioral scenario, by delaying eligibility for SSI and Medicaid.
  • The RSAA could be cumulatively net positive from a budgetary perspective after 30 to 45 years, driven primarily by delaying eligibility for Medicaid.
  • The RSAA account program’s overall financial health is sensitive to key behavioral assumptions, including the potential for crowding out of employers’ retirement plans and individuals’ retirement savings spend-down rate.

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Price, Carter C., Jeffrey B. Wenger, Philip Armour, Matthew B. Forbes, and Hsin Sheng Ma, Impacts of the Retirement Savings for Americans Act: A Preliminary Analysis Using the RAND Budget Model. Santa Monica, CA: RAND Corporation, 2025. https://www.rand.org/pubs/research_reports/RRA2614-3.html.
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Version Note

This publication supersedes a previous version published in 2025 (WR-A2614-1).