“Workers that have no access to a payroll savings plan stand to replace just 42 percent of their current incomes at the median and that includes Social Security,” Reynolds says. “But simply having access to workplace savings nearly doubles that income replacement rate at the median to 79 percent.”
Automatic enrollment with an opt-out raises the rate of fully funding retirement to 92 percent. Automatic escalation increases the rate to over 100 percent, he said.
Approving these savings initiatives would result in an increase in the savings rate of hundreds of billions of dollars a year, Reynolds says. And that, he adds, is important “because savings drive growth.” He says that the nation’s $26 trillion in retirement savings “has already become a vital source of financing for our capital markets.” More savings, Reynolds said, would help close the inequality gap and lead “to a true peoples’ capitalism.”