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

There is a significant amount of data showing that too many Americans struggle to save enough for retirement, and policymakers have long worried the U.S. is facing a looming retirement crisis.

People are living longer, and certain sources of guaranteed retirement income that were relied on in the past, like pensions, are increasingly uncommon. The challenge is even greater for particular segments of the American population, including women, Black and Hispanic Americans as well as small business owners and those who work in the agricultural sector.

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.

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 retirement savings, enable Americans to save more, promote financial literacy and support a strong retail investor culture. Overall, the message needs to get out loud and clear – individuals of all income levels should be able to get started in investing, invest for the long-term, and consider working with a professional financial advisor for their financial health and stability.