New Bill Would Lower Age to Contribute to 401(k)s to 18 from 21. What You Need to Know

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Should 18-year-olds have access to workplace retirement plans like 401(k)s? If bipartisan legislation reintroduced this week in Congress becomes law, they'll be able to.

A new bill, S.3305, the Helping Young Americans Save for Retirement Act, (re)introduced this past Monday, would lower the minimum age for employees participating in workplace retirement plans, like a 401(k), from 21 to 18.

As of September 30, 2024, there were about 70 million active participants enrolled in 401(k) plans, according to the Investment Company Institute (ICI). Although a company can offer a 401(k) plan to their employees under 21 years old, many do not because of high costs and red tape.

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This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986 regarding minimum participation standards for pension plans and qualified trusts.

Republican Senator Bill Cassidy of Louisiana, a co-lead sponsor of the bill, said, “Americans who don’t attend college and immediately enter the workforce should be given every chance to save for retirement, Cassidy added. "This legislation empowers American workers, giving them more opportunities to plan for a secure retirement.” Cassidy chairs the Senate Health, Education, Labor, and Pensions (HELP) Committee.

In some cases, the bill would lower the age of ERISA-covered defined contribution plans to 18 years old from the current age of 21. The bill would also remove provisions that legislators say could make covering younger workers too expensive for businesses. They might include delaying ERISA guidelines that state companies must take part in audits if they allow employees under the age of 21 to contribute to retirement plans. The legislation would also exempt 18- to 20-year-old employees from nondiscrimination testing, currently required.

Due to SECURE 2.0, younger workers are more likely to be automatically enrolled in employee retirement plans, due to lower engagement; if 18- to 20-year-olds were to qualify for plans, then those who chose not to opt in would also be automatically enrolled.

The legislation has earned endorsements from several financial services and retirement planning organizations. The list includes the Insured Retirement Institute, Edward Jones, TIAA, the American Benefits Council, Transamerica and the National Rural Electric Cooperative Association (NRECA).

Current Status (as of May 2025)

The bill was first introduced in the Senate on November 15, 2023, and referred to the Committee on Health, Education, Labor, and Pensions (HELP). As of May 16, 2025, S.3305 from the 118th Congress is likely expired due to the end of the congressional session, with no recorded advancement beyond its introduction and committee referral.

For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.