A Safety Net For Retirement Security Is Not Guaranteed

Medicaid and the means-tested Supplemental Security Income program are not guaranteed. If retirees have enough money to avoid SSI or Medicaid, that is not a loss of dignity. Everyone needs access to a modest and independent supplement to Social Security.

AEI’s Biggs treats Medicaid and SSI as “stable backstops” that workers can reliably count on. They are not. The One Big Beautiful Bill Act, which became law on July 4, 2025, cut federal Medicaid spending by nearly $1 trillion over ten years, according to the nonpartisan Congressional Budget Office. State Medicaid budgets will fall by a combined $665 billion over the same period. Work requirements take effect in late 2026. Seventeen million people are projected to lose coverage by 2034, millions of the losers are over age 60.

And SSI has its own precarity: as a discretionary program, Congress can tighten, freeze or restructure it at any time — as it has done repeatedly. Therefore Biggs wrongly builds his argument on the assumption that low-income workers should stay poor and immiserated so that they can be eligible for programs that are evanescent. SSI and Medicaid are, at this moment, undergoing systemic dismantling.

AEI Ignores How Some American Workers Actually Get Retirement Security

A third problem with the critique is the most revealing. Biggs argues that the real problem for poor seniors is lifelong poverty — that they were poor throughout their working lives and that pushing retirement saving cannot fix that. Again, he is partly right. But the question is: how did some low-income workers manage to build retirement security despite low wages?

The answer is unions. For much of the twentieth century, collective bargaining delivered defined benefit pensions and retirement accounts to workers across the income distribution — workers who, by Biggs’s logic, were too poor to save. The RSAA does not invent something new. It replicates, through a federal mechanism, what unions built through negotiation. As David Madland, Christian Weller and my own unpublished research have documented, the erosion of union density is the single largest driver of the retirement coverage gap among low- and moderate-income workers.

For workers without union representation today, the RSAA is the institutional substitute. Telling those workers they should wait for Social Security expansion — which Congress has failed to deliver for thirty years — while the safety net shrinks beneath them, is not a policy. It is an abdication.

The Evidence About Asset Limits And Retirement Security Accounts

Here is what the evidence actually supports. For some workers near the asset limits of Medicaid and SSI, the interaction between retirement savings and means-tested eligibility deserves careful attention — and the RSAA’s designers know this. The solution is to reform asset limits in means-tested programs, not to abandon retirement coverage for 54 million workers. Several states have already exempted retirement accounts from Medicaid asset tests. Federal policy should follow.

AEI asks whether saving for retirement could make low-income Americans worse off. Under the current design of means-tested programs, the answer for a narrow subset of workers is: possibly, temporarily. The right response is to fix the asset test, not to conclude that low-income workers shouldn't save.

Meaningful Retirement Security

The Trump proposal is a meaningful administrative step. It needs legislation behind it — the RSAA — to deliver contribution rates, eligibility breadth and benefit protections that actually replace income in retirement.

A civilized society helps people grow old with dignity after a lifetime of work. Retirement security should not be a privilege for the few who happened to work for the right employer or earn enough to benefit from tax breaks. It should be a basic part of how our economy works.

Today, roughly half of American workers remain outside the retirement system entirely, and millions more are in plans that are too small, too risky or too complicated to provide real security. A simple, safe, universal way for workers to save for their own old age is long overdue.

The research is clear, and so is common sense: people do not want to grow old expecting to rely on programs designed for the poor. They want to contribute, save and earn a dignified retirement of their own. Public policy should help them do exactly that.