The center-right Washington, D.C., think tank American Enterprise Institute economist Andrew Biggs raises a legitimate concern about President Trump's State of the Union retirement proposal — and then draws exactly the wrong conclusion from it.

At the State of the Union address, President Trump announced plans for an executive action to give workers without employer-sponsored plans "access to the same type of retirement plan offered to every federal worker," paired with a federal match (passed during the Biden years) of up to $1,000 a year.

The proposal closely follows the bipartisan Retirement Savings for Americans Act, sponsored by Sens. Hickenlooper and Tillis and Reps. Sewell and Smucker. Biggs argues that for many low-income workers, an RSAA-style account could do more harm than good: accumulated savings might disqualify them from Medicaid and SSI, programs with strict asset limits, leaving them worse off than if they had never saved at all. Axios echoed the concern: portable accounts might help some workers but leave others with too many assets to qualify for long-term care Medicaid and not enough to replace it privately.

The critique is analytically coherent. It also rests on a foundation that no longer exists.

Biggs does not offer a retirement security strategy or anything positive or constructive. Sens. Tillis and Hickenlooper and Reps. Sewell and Smucker do have a plan, and it complements and lifts up President Trump’s vision for universal pensions.

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.

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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.

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Retirement Accounts And Social Security Are Complements, Not Substitutes, for Retirement Security

Biggs argues that the better remedy for poor seniors is stronger direct old-age income support — expanded Social Security for low earners — rather than pushing retirement saving. He is right: Social Security needs expanding and strengthening. He is wrong that the RSAA stands in the way.

The RSAA does not replace Social Security. It does not replace Medicaid. It fills the specific gap that Social Security and Medicaid never aimed to fill: the absence of any advance-funded retirement account for the half of American workers who have no workplace plan. According to the Economic Innovation Group, 69 million workers (55.5%) lacked any employer-provided retirement plan in 2021.

As I wrote in Work, Retire, Repeat, the retirement crisis is not one problem — it is a system of interlocking failures. Coverage gaps, inadequate Social Security benefits and the collapse of defined benefit pensions reinforce each other. Closing the coverage gap does not crowd out Social Security expansion. It runs alongside it.

The RSAA actually strengthens the case for Social Security by demonstrating that the federal government can build and administer a universal retirement infrastructure. The two are additive.

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.

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