Consider a young worker starting their first job today. Recent legislation means they’re likely automatically enrolled in a 401(k) from day one — real progress. But fast-forward a few decades: that same worker may have cycled through six employers, accumulated a tangle of small accounts, and still face the question that haunts millions of Americans: Will this be enough?

That story is increasingly the norm. Longer lifespans, less linear careers, a rising cost of living, and tighter government budgets are redefining what retirement security even means. The 2019 SECURE Act and its 2022 successor made meaningful progress — but gaps in longevity protection, savings adequacy, and coverage persist. With 401(k) and 403(b) plans now the backbone of retirement for most Americans, the case for deeper reform is urgent.

The Mercer CFA Institute Global Pension Index — which benchmarks retirement systems across 50+ markets on adequacy, sustainability, and integrity — makes the problem concrete. The U.S. scores well on integrity but consistently lags on adequacy and sustainability, exactly where reform could have the most immediate impact.

The result: the U.S. sits in the middle of the global rankings while countries like Australia lead the pack. Without reform, more Americans risk reaching retirement without enough income — or the tools to access what they’ve saved.

Where reform is needed most

1. Turn savings into income that lasts

Saving is only half the challenge. The harder problem is converting a 401(k) balance into reliable income that doesn’t run out. Too often, workers change jobs and cash out small accounts rather than rolling them over — permanently shrinking their retirement nest egg.

With the U.S. population over 60 projected to double by 2050, longevity risk isn’t abstract. Simpler rollover processes and clearer disclosures would go a long way toward helping workers preserve their savings — and plan for a retirement that could last 30 years.

2. Close the coverage gaps

Retirement savings in the U.S. remain deeply uneven. Younger workers, part-timers, and caregivers are the most underserved — and many have little visibility into whether they’re on track.

Three targeted fixes could close much of that gap: automatic reenrollment for workers who previously opted out; extending coverage to workers under 21, building on the SECURE Act’s expansion for part-timers; and special catch-up contributions for caregivers who temporarily leave the workforce. Together, these changes would broaden access and reward the workers most likely to fall behind.

3. Modernize investments — and reduce legal risk

In 2025, the President signed an executive order directing regulators to ease restrictions on private market investments in 401(k) plans — following Australia’s long-standing approach. Giving savers access to private equity, venture capital, and digital assets could improve diversification and returns. But many employers are still waiting on clear guidance around fiduciary safe harbors, liquidity, and fees before they act.

Allowing 403(b) plans — which cover millions of government and nonprofit workers — to invest in collective investment trusts, as 401(k) plans already can, would lower costs and broaden access for an underserved segment of the workforce.

Legal risk is also a growing deterrent. Employer-sponsored plans have faced a surge of litigation in recent years, and policymakers should explore targeted ways to deter frivolous lawsuits while keeping legitimate claims viable.

Pensions still matter

Most new retirement savings now flow into 401(k)s and 403(b)s, but a significant share of existing retirement wealth still sits in traditional defined benefit pensions. Modernizing the system can’t mean abandoning what still works.

Lowering Pension Benefit Guaranty Corporation (PBGC) premiums would encourage employers to keep sponsoring DB plans. Greater flexibility in deploying surplus DB assets could also benefit both workers and plan sponsors.

Policymakers should also support DB designs that reduce financial volatility for sponsors — such as pooled employer plans, which would make it easier for smaller organizations to offer a pension at all.

The bottom line

Better retirement policy isn’t about winning a global ranking. It’s about ensuring future generations can retire with dignity — even as careers grow less linear and lifespans grow longer.

The reforms outlined here — expanding lifetime income options, closing coverage gaps, modernizing investment rules, reducing legal risk, and strengthening pension protections — would make the U.S. system more resilient and more fair. The window for action is open. Policymakers shouldn’t let it close.

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