At the Spring NCOIL Meeting, the Life Insurance and Financial Planning committee heard presentations from the TIAA Institute and the American Academy of Actuaries highlighting that strong retirement security policy should aim to support 80% income replacement, expand access to retirement savings vehicles, and address the distinct challenges gig workers face through solutions such as auto-IRAs, portable benefits, and enhanced financial education.
Research from the TIAA Institute highlights that successful state retirement systems share a common goal: enabling individuals to replace roughly 80% of their pre-retirement income to achieve financial security. Encouragingly, there is broad consensus that this benchmark is attainable regardless of the specific approach a state adopts. Key policy recommendations to strengthen outcomes include expanding access to qualified plan options, increasing default contribution rates (for example, raising the baseline from 4% to 7%), and offering supplemental retirement plans with lifetime contribution features at no cost to the state. Together, these strategies can better position states to provide more effective and sustainable retirement solutions.
At the same time, retirement security remains a significant challenge for gig workers, who often lack access to traditional employer-sponsored plans. This group—ranging from high-income professionals to lower-wage, on-demand workers—faces barriers such as inconsistent income, limited savings options, and insufficient financial education. While options exist through Social Security, IRAs, and emerging state programs like auto-IRAs and portable benefits initiatives, participation remains uneven. Policymakers are exploring solutions including expanding state auto-IRA programs, advancing portable benefits models, and improving financial literacy tools. Continued innovation and potential federal action—such as extending incentives like the Saver’s Match to Roth accounts—will be critical to improving retirement outcomes for this growing segment of the workforce.
Prospects: There has been steady momentum on the enaction of state-facilitated retirement programs across the country. NAIFA continues to encourage utilizing the already-robust private plans marketplace and working with a financial professional, like a NAIFA member, to ensure Americans are adequately prepared for retirement.
NAIFA Staff Contact: Bianca Weiss – State Government Relations Director at bweiss@naifa.org, and Roger Moore – Senior Policy Director at rmoore@naifa.org.