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Opinion

By James T. Brett and U.S. Rep. Richard Neal

Core to the premise of the so-called American Dream is the idea that, if you work hard over the course of your career, you’ll get to enjoy a secure retirement. Unfortunately, for far too many Americans, that simply is not the case.

Consider this: nearly half of U.S. households with people age 55 and older have no savings for retirement. And almost 50% of private-sector workers — some 58 million people — do not even have access to a retirement plan through their employer, including small-business workers, self-employed workers, and gig workers.

Yet a typical Social Security check covers less than 40% of pre-retirement earnings, and that number is projected to drop to less than 28% within two years. At the same time, people are living longer. According to the World Economic Forum, a baby born in 2007 stands to live to be 103 — 36 years beyond Social Security’s current full retirement age. To further complicate matters, the student-debt crisis is also having an impact, with younger workers putting off saving for retirement because they are struggling to pay off student loans.

So how do we address this problem and ensure that all Americans are prepared for their golden years? There are several steps we can take that would have a tremendous impact.

First, we must continue to preserve tax incentives that encourage individuals to save for retirement. Allowing workers to contribute pre-tax wages to a 401(k) or other qualified retirement plan is a simple and proven way to encourage savings.

Second, it is critical that we take action to increase financial literacy — and that needs to start at a young age. It’s important that young people appreciate how student debt will affect them later in life, that younger workers understand just how much they need to be saving to be prepared for retirement, and that all employees are aware of the various tools available to them to invest in their own future.

… a typical Social Security check covers less than 40% of pre-retirement earnings, and that number is projected to drop to less than 28% within two years.

Finally, we must take steps to expand access to and increase participation in retirement-savings products and plans. In particular, we must make it easier for small businesses to offer retirement-savings plans by eliminating barriers for such businesses to band together in multiple-employer plans, thereby simplifying administration and lowering fees. It is also important to provide incentives for businesses to offer plans with automatic enrollment, and to require them to allow long-term part-time workers to have access to retirement benefits.

Congress must take bold action to bolster retirement savings and ensure that all Americans have access to the tools they need to save for their golden years. This crisis presents an opportunity for leaders in Washington to work collaboratively toward bipartisan solutions. The good news is that there already are bipartisan, bicameral efforts underway in Congress to pass legislation to bolster retirement savings.

The business community and our leaders in government must continue to work together to address and resolve the retirement-savings crisis facing our country. We owe it to the millions of Americans who work hard each and every day to keep our economy growing. We are hopeful that Congress will indeed take action on this important issue in the coming months so that all Americans will be able to realize the dream of a well-earned, secure retirement.

James T. Brett is president and CEO of the New England Council, a non-partisan, regional business association. U.S. Rep. Richard Neal represents Massachusetts’ First Congressional District and is the chairman of the House Ways and Means Committee.