'Work and Save' Programs Reach Milestone: 1 Million Accounts

For more than a decade, AARP has been at the forefront of nationwide efforts to expand auto IRAs and other work-and-save options to help more such workers build nest eggs. 

“AARP has worked tirelessly to ensure hard-working Americans who want to put a little away for retirement can,” says AARP Government Affairs Director Jessica Eckman. “Reaching 1 million savers is a powerful reminder of what’s possible when we work together to ensure all Americans can prosper. Behind every dollar saved is a person who deserves a chance at a secure retirement after decades of hard work.”

“The growth of these programs across the country proves that when we make saving easy and accessible, people will take the steps needed to retire with greater financial security and dignity,” says Oregon State Treasurer Elizabeth Steiner. “It’s a success story we can all be proud of — and a reminder of what’s possible when states lead with innovative, people-first solutions.”

Numbers expected to swell

Auto IRAs, the predominant type of work-and-save program, allow most private employers that don’t sponsor their own savings plan to automatically enroll workers in a state-facilitated individual retirement account, typically starting at a savings rate of 3 percent to 5 percent of their paychecks. 

The rate increases each year, up to a predetermined maximum. (Employees can opt out or change their rate at any time.) Employers  facilitate the payroll deductions but otherwise face no financial or administrative burdens. And because the accounts are maintained by the state rather than the employer, they follow the workers as they move to different jobs.

Auto IRAs have caught on relatively quickly, offering a savings solution to workers, small businesses and states.

“Most of the programs have been around for under five years. So, this is a pretty impressive growth pattern,” says David John, a senior policy adviser with AARP’s Public Policy Institute and one of the architects of the auto IRA concept.

“What's important to remember when we look at the 1 million in funded saver accounts is the fact that while many of these accounts are in some of the earliest adopter program states, like California, Oregon and Illinois, many of these programs are, in fact, still very new and have opened within the past 18 to 24 months,” says Angela Antonelli, executive director of the Georgetown Center for Retirement Initiatives. 

“The fact that we've already reached 1 million is significant,” she says. “As some of these newer programs really get off the ground and get a little bit older, we'll continue to see a rapid acceleration in the number of funded saver accounts.”

More companies, states stepping up

One policy concern raised when auto IRAs were in their infancy was that they could deter small businesses from offering 401(k)s. Why foot the bill for their own plans when there’s a state option available to their employees at no cost to the business? 

Research has found that auto IRAs have had the opposite effect so far. An August 2024 study from the Georgetown Center found that an estimated 30,000 businesses established retirement plans after auto IRA programs started in their states.

Jill Nelson’s is one of them. Her Portland, Oregon-based dog-walking and pet-sitting company, Hot Diggity!, first began offering retirement benefits to its 35 employees through OregonSaves. However, staff at the company’s second office in nearby Vancouver, Washington, weren’t eligible. (Washington state has an auto IRA program in the works, but it isn’t scheduled to launch until 2027.)

Nelson decided to switch to a 401(k) plan so she could cover workers in both locations. She says OregonSaves helped her see the business benefits of retirement savings offerings.

“I am over 65 and I'm semi-retiring, so I'm looking at the long-term impacts of not necessarily always saving as much as I could have or should have. I think it's going to be an even bigger challenge for the generations behind me,” she says. “It's just so critically important that states step up and make something like this available and make it easy for small business owners to offer something that's very valuable to their employees.”

Along with the 20 already on board, several states are considering implementing work-and-save programs. According to the Plan Sponsor Council of America, lawmakers in Alabama, Indiana, Mississippi, and North Carolina have introduced state-facilitated retirement savings legislation so far in 2025. 

Other states that previously introduced work-and-save legislation that did not become law continue to push for these retirement-saving policies that can help workers who otherwise would not have access.

“These are people we all depend on every day, like the mechanic who keeps our car running and the waitress that tops off our coffee,” says Pennsylvania Treasurer Stacy Garrity. “Two million hardworking Pennsylvanians without access to workplace retirement plans deserve to have the same opportunity to save.” 

Eckman says expanding work-and-save programs and enrolling more workers in states where they already exist will be key to helping more Americans secure their retirement future.

​“Reaching 1 million savers is a tremendous achievement, but we’re just getting started,” she says. “AARP is working closely with leaders across the country to enact and improve retirement savings options, ensuring every worker has the opportunity to build financial security for the future. ​“The momentum is clear — workers, businesses, and taxpayers all recognize the value of these programs, and AARP continues to push forward."