As a financial advisor, one of the more frustrating conversations I have is with 18- to 20-year-old employees eager to start saving for retirement—only to tell them they have to wait until they turn 21 to join their employer’s 401(k) plan. It's disheartening, especially when we know how powerful the time-value of money is at that stage in life. Starting early can make a significant difference in achieving long-term financial security.
Fortunately, there’s a renewed effort to change this. Senators Bill Cassidy (R-LA) and Tim Kaine (D-VA) have reintroduced the Helping Young Americans Save for Retirement Act. This bipartisan legislation would lower the required minimum age for participating in employer-sponsored defined-contribution retirement plans from 21 to 18.
The bill doesn’t just benefit young workers—it also aims to reduce the administrative burden on employers. Specifically, it would eliminate some of the costly requirements that discourage businesses from including younger employees in retirement plans. For example, it delays ERISA provisions that trigger mandatory audits when under-21 employees are allowed to contribute. It also exempts 18- to 20-year-old participants from certain retirement plan testing that can otherwise increase costs.
If passed, this legislation would be a win-win: giving young workers a critical head start on retirement savings while helping employers offer broader access without added financial strain.