Helping Americans build savings for a secure retirement is among the most important roles of the U.S. capital markets.

Individuals of all income levels can start investing, invest for the long-term, and have access to work with a professional financial advisor who serves as a critical link in helping investors meet their goals.

Changing demographics, including increasing longevity, underscore the need for a robust private retirement system. Policy makers must continue to address the challenge of encouraging and facilitating saving and investing for retirement across our society.

Today, U.S. workers are increasingly relying on individually funded retirement plans, such as 401k’s and IRA’s. Defined contribution plans account for $7.4 trillion in assets, growing at a 7% compound annual growth rate over the last decade. Both through their employers and individually, Americans today are largely responsible for building their retirement accounts themselves. Over 56% of total retirement assets are individually funded through defined contribution retirement plans and IRAs. Because individual savers play a greater role in the decision-making regarding their investments, access to a financial advisor is even more important today to help individuals prepare for their future.

SIFMA is committed to increasing retirement security for all Americans and has identified three primary pillars to reach this goal:

1. Expanding access to plans;
2. Increasing participation and decreasing leakage; and
3. Enhancing education.

SIFMA supports legislation including the Securing a Strong Retirement Act of 2021 (SECURE Act 2.0) and the Retirement Security and Savings Act of 2021, comparable bills which represent important steps toward enhancing the private retirement system and increasing retirement savings. Both include provisions to incentivize small business to offer retirement plans, expanding small business savings; enable older Americans to save more and hold on to their savings longer; and allow matching contributions for student loan payments.

With efforts such as these, we can boost participation in retirement savings, enable Americans to save more, promote financial literacy and support a strong retail investor culture.