Give today and help older adults facing poverty during Older Americans Month. Donate today

Content starts here

A Better Way Forward for Retirement Savings in Iowa

Our retirement savings system is not working as well as it should, and reform is urgently needed. Americans across the political spectrum are struggling to prepare for their financial futures, and policymakers are finally beginning to acknowledge that reality.

Paige Yontz,

AARP Iowa Advocacy Manager

Published May 15, 2026

401k and IRA golden eggs on one dollar bills

Getty Images/iStockphoto

There is both good news and bad news when it comes to retirement savings today.

The good news: President Trump has elevated the national conversation around retirement security with a recent executive order to establish a government website where people can find and compare private-sector retirement savings accounts.

The President’s decision to act underscores an undeniable truth: our retirement savings system is not working as well as it should, and reform is urgently needed. Americans across the political spectrum are struggling to prepare for their financial futures, and policymakers are finally beginning to acknowledge that reality.

Americans are fifteen times more likely to save for retirement when they have access to an employer-sponsored plan (such as a 401(k), 403(b), or IRA) with automatic payroll deduction.

Here’s the bad news: even with this significant step forward at the federal level, nearly 40 percent of Iowans will still lack access to a workplace retirement savings plan. For these workers, automatic payroll deduction – one of the single most effective savings tools – remains out of reach.

Small businesses are the heart of our communities, yet many small business owners struggle to compete for talent as larger employers can offer more robust benefit packages. Retirement savings plans are often one of the first benefits to fall by the wayside.

This isn’t because small business owners don’t care. According to a recent AARP Iowa survey, 85 percent of small business owners say offering access to a retirement savings plan would help them recruit and retain employees, helping them to remain competitive in today’s labor market. The challenge is cost and complexity: 65 percent say existing private plans are too expensive to offer, and 34 percent say they are too complicated to administer.

So, how do we give small businesses the tools they need to support their employees’ financial futures without fiduciary liability or administrative burden?

Most Popular

The answer is simple: a state-facilitated retirement savings program.

Across the country, 17 states have already enacted state facilitated retirement savings programs, helping more than a million workers begin saving for their futures.

These programs work through a straightforward, commonsense approach. By legislative action, the state establishes a payroll deduction IRA program. Employers that do not already offer a retirement plan enroll their employees in the state-facilitated program. The state handles the logistics and administration of the plan; employers simply provide an information packet and facilitate payroll deductions. Employees gain access to a secure, reliable way to save for retirement.

The benefits are clear. Employers gain a competitive edge in attracting and retaining workers. Employees gain a practical way to build financial security. And the state reduces the long term risk that future retirees will be forced to rely on taxpayer funded safety net programs like Medicaid and SNAP when their savings fall short of their basic needs.

Over the past two legislative sessions, AARP Iowa has worked to elevate this issue, backed by a strong legislative champion, support from the State Treasurer, and minimal organized opposition.

The recent executive order is an important step toward acknowledging the retirement savings crisis. Now Iowa has an opportunity to build on that momentum and close the access gap. But the work cannot be done in Washington alone. It must happen right here on our Main Streets – by giving small business owners practical, easy tools to help their employees save for a secure retirement.