State-run retirement programs are revolutionizing how Americans save, and the numbers back it up.
Earlier this year, automatic IRA programs surpassed 1 million enrolled workers — a significant milestone highlighted by AARP.
This surge in participation reflects growing momentum behind state-level efforts to close the retirement savings gap for millions of private-sector workers.
AARP reports that roughly 56 million private-sector employees between 18 and 64 still lack access to an employer-sponsored retirement plan, such as a 401(k) or pension.
State-facilitated savings programs offer these individuals a new opportunity to build long-term financial security.
How auto-IRAs work for you
Auto-IRAs offer a straightforward path to retirement savings. Once an employer signs up for a state-run program, workers are typically enrolled automatically in an individual retirement account (IRA), with contributions deducted directly from their paycheck.
These programs are designed to minimize burdens on employers, with no direct costs and only limited administrative responsibilities.
Oregon was the first state to roll out such a program with the launch of OregonSaves in 2017. Additional programs are under development in other states.
Why small businesses are jumping on board
LaVante’ Dorsey, the owner of a mental health counseling practice in Delaware, saw firsthand how a state-run retirement program can help small businesses support their employees, AARP reports.
Her business, LaVante’ N. Dorsey & Associates, was unable to offer retirement benefits to its seven therapists until the Delaware EARNS program launched in late 2023.
The new program allowed her and her employees to begin saving for retirement through automatic payroll deductions.
Programs like Delaware EARNS offer small businesses a practical, low-cost alternative to traditional retirement plans.
Workers who stand to gain the most
Auto-IRAs are particularly beneficial for workers historically excluded from employer-based retirement plans.
AARP research notes that employees of small businesses, as well as low-income, Black, and Hispanic workers, face disproportionate challenges when it comes to accessing workplace retirement benefits.
By making retirement saving automatic and portable, state-run programs help address these disparities.
Because the accounts are managed by the state and not tied to a single employer, workers can keep saving even as they change jobs. This flexibility makes the programs especially well-suited for today’s mobile workforce.
The expanding landscape of state programs
The growth of state-facilitated retirement programs continues to gain traction. AARP sees the rapid enrollment growth as proof that these programs are gaining real momentum nationwide.
The organization emphasizes that these programs are designed to be simple for employers and beneficial for workers without access to traditional retirement plans.
While several states have already launched successful programs, others are exploring similar legislation to address the widespread gap in retirement savings options.
Taking action on your retirement savings
If you live in a state with an auto-IRA program and work for a business that doesn’t offer retirement benefits, you may be able to enroll in a state-facilitated retirement savings plan. Ask your employer if it’s possible to gain access to your state’s savings plan.
These programs are designed to simplify saving. They use automatic payroll deductions and follow you across jobs, making it easier to save consistently.
The growth of these initiatives shows they are filling a critical gap in retirement access for millions of Americans.
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