Michelle Gregoire was a server at Purple Toad Social Tap and Grill outside of Colorado Springs in 2023 when the state began facilitating a retirement savings program. Until then, Purple Toad had not offered a retirement plan. Once the plan, called Secure Savings, became available, Gregoire said she began depositing a portion of her paycheck into the Colorado Secure Savings’ individual retirement account, or IRA.
“I started with a small amount and increase [contributions] when I can,” Gregoire said. “It was easy to do, and I can see the rewards of it as savings grow with time.”
Such programs are allowing state governments to gain ground in their efforts to offer millions of workers access to retirement savings plans through their jobs for the first time.
The progress is largely due to a policy innovation called auto-IRA, under which private sector workers who do not have a workplace retirement plan are automatically enrolled in a state-facilitated retirement savings program.
Nine years after the first such plan in the nation—Secure Start—began in Oregon the auto-IRA movement has grown considerably, and reached a milestone in 2026: Nearly 1.2 million participants across 15 states have amassed more than $3 billion in savings as of early May. When programs start in Hawaii and Washington this year, there will be 17 states offering these programs.
The steady, exponential growth of payroll deduction IRAs comes at a time when many workers are living longer and also are not sufficiently prepared for retirement.
“While the auto-IRA is off to a promising start, we need to keep the momentum going, because the older population is growing,” said John Scott, director of the retirement savings project at The Pew Charitable Trusts. U.S. Census Bureau figures consistently show growth in the population age 65 and older, and declines in age groups under 18.
This information echoes a 2023 report from the National Conference of State Legislatures (NCSL). The report, created in collaboration with Pew and Econsult Solutions, also warned that the growing number of retirees who lack sufficient retirement savings will strain public assistance programs and could ultimately cost state and federal governments over $1 billion by 2040.
To help address this concern, Pew has been a strong supporter of auto-IRA plans and a leader among nonprofits in providing nonpartisan data, analysis, and technical support to help states implement these plans. Auto-IRAs are part of the solution to the retirement savings gap.
Some states have quickly embraced the auto-IRA concept. In February, Colorado’s program reported that it had enrolled more than 100,000 savers in three years, with assets nearing $200 million. The accounts prove how the state is “fundamentally reshaping” Coloradans’ financial future, said State Treasurer Dave Young.
Courtney Eccles, a senior vice president at Vestwell Government Savings in Colorado Springs, specializes in state auto-IRA program management. She attributed the interest in part to the straightforward plan design.
“Sometimes there’s an urge in some programs to take something that’s working and overcomplicate it,” said Eccles. “When you look at these programs and where we are now, one of the greatest achievements of auto-IRA is that states have done an incredible job keeping the design simple.”
The programs are responding to a demand to close the gap in coverage. Of the estimated 6 million U.S. small businesses, about half (49%) employ one to four workers, according to Pew Research Center. Like most companies today, small businesses do not offer their workers defined-benefit pensions and say they cannot afford to put money into alternatives such as 401(k)s. This leaves nearly 60 million Americans, many of them modest-wage earners such as Gregoire, with only their savings and Social Security when they stop working.
“We recognize that American workers are not saving enough for a financially secure retirement, which means these individuals will be living in a precarious state after they leave the workplace,” said Pew’s Scott.
Automatic enrollment in a state-run IRA ensures higher participation than if the plans were voluntary for the employees. “We’ve found that workers at small businesses are very likely to set aside money for retirement if they have easy access to a savings plan at work,” said Scott. “And then they put away money on a regular basis through payroll deduction.”
Rules and structures vary from state to state, but generally the plans are easy for workers and companies to set up with an automatic payroll contribution rate. Although workers are automatically enrolled, they can opt out at any time. Private companies, which cannot match contributions, would need to complete only a small amount of paperwork and handle paycheck deductions in much the same way they already do with payroll taxes. Employers can participate in the state IRA or sponsor their own plan at any time—and federal data shows that states with auto-IRA programs have rates of private plan creation at or above the national average.
Importantly for a generation that changes jobs frequently, the auto-IRA accounts are portable, because the employee owns the IRA. If workers switch jobs or move to another state, they can take their retirement savings with them. There are tax advantages too. Growth and withdrawals in a Roth IRA are tax free, because workers contribute post-tax dollars.
After Rhode Island launched its auto-IRA savings program last fall, it took the state just 90 days to register over 500 companies with the minimum five employees needed to participate.
General Treasurer James Diossa said the state initially connected 3,000 workers to a “simple, affordable” plan, and for many, it was their first experience with a retirement account. “The early registration success reflects the clear need for an accessible retirement savings option among Rhode Island workers,” Diossa said.
Rhode Island is partnering with Connecticut, one of several state collaborations on auto-IRA plans that have emerged as officials have realized they can save money by working together. Increasing the pool of participants and assets helps to lower account fees and boosts savings, which aids small state plans in particular.
Jessica Muirhead, executive director of Connecticut’s payroll savings plan, MyCT Savings, said the accounts added by Rhode Island create a combined larger pool of participants that could lower program fees in the future.
Partners maintain some autonomy. Although Minnesota currently partners with Colorado, Delaware, Maine, Nevada, and Vermont, the program is administered by Minnesota state employees, with investments monitored by the Minnesota State Board of Investment.
The savings programs are consistent with Pew’s belief that the financial well-being of the labor force also benefits the fiscal health of state and local governments coping with increasing social assistance costs for programs such as Medicaid.
“Insufficient retirement savings may mean older Americans will need to request help from federal, state, or local budgets,” Scott said. But this is a fixable problem: The NCSL report also found that modest savings of $140 a month over 30 years would erase that fiscal imbalance.
Going forward, governments at all levels are drawing attention to the need to strengthen opportunities for Americans to access employer sponsored-retirement savings plans.
Under a proposal led by AARP, auto-IRAs would expand to a universal access, 50-state retirement savings system called Auto-IRA Plus.
“It’s the next generation,” said David John, an AARP senior strategic policy adviser who was influential, along with Pew and the Brookings Institution, in the early development of automated plans.
If approved by Congress, Auto-IRA Plus would retain the low-cost structure of auto-IRAs aimed at small businesses. John said he hopes that “Plus” would lead to universal retirement savings coverage in part because it builds on the accomplishment of auto-IRAs.
“We are moving from individual state programs to national coverage,” John said. “The first generation showed us the value of automated plans and that they work. The next generation would scale it up so everyone has the opportunity.”
U.S. Representative Richard Neal (D-MA) cited the success of state auto-IRAs when he sponsored federal legislation that would require companies nationwide with more than 10 employees to automatically enroll their workers in a retirement savings plan. Smaller companies would be eligible for tax credits. Although Neal reintroduced the bill in December, it has not advanced since it first was proposed in 2010, in part because of partisan division in Congress.
President Donald Trump acknowledged the access gap in this year’s State of the Union address. He said the administration would support increasing private employee access to the same type of retirement plan offered to federal workers. The government’s universal plan, which would be separate from Social Security, would match employee contributions up to $1,000 a year. Although the plan would expand access, it would not, as proposed, automatically enroll workers.
Cities are also showing interest in expanding employee access to IRAs. On May 19, Philadelphia voters approved PhillySaves, an auto-IRA savings program in which eligible workers would contribute 3% to 6% of their paycheck into an IRA. New York City and Seattle passed similar initiatives that were later preempted by statewide plans.
Although the early results are encouraging, auto-IRAs still face hurdles. One is that most of the early adopters are blue states. Historically, lawmakers in GOP-led states have expressed doubts about government-mandated programs, especially those that affect small businesses.
But there are growing signs of interest as policymakers weigh the positive results from state auto-IRAs and respond to constituent pressure to support access to retirement security. Nevada’s auto-IRA legislation was approved with bipartisan support, for example. And in 2025, GOP lawmakers sponsored auto-IRA bills in Alabama, Arkansas, Indiana, and Tennessee.
In the end, auto-IRA programs are maintaining growth in assets, accounts, and employer registrations.
“In a world of competing costs, it is hard to save for retirement,” said Rhode Island’s Diossa. “This program puts retirement savings front and center by providing an easy savings vehicle employees do not have to seek out on their own time.”
Stephen Fehr is a former state fiscal expert for The Pew Charitable Trusts and a frequent contributor to Trust magazine.
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