Bernie Sanders Says the 401(k) System Is Rigged Against Employees

Bernie Sanders has been a vocal advocate for consumers, especially regarding retirement plans. Over the past few months, he's advocated against new 401(k) policies, such as allowing private equity and cryptocurrency in plans. He's also brought awareness to the growing problem of poverty among seniors.

Here are some reasons Sanders says the 401(k) retirement plan system is rigged against employees, as well as some suggestions he has for improving it. Keep in mind that many of Sanders' views are rooted in his belief that it's unfair for American workers to have so much retirement uncertainty when previous generations did not.

The loss of pensions

In a Fox News Op Ed, Sanders wrote that the retirement system in America is a "disaster for working people." He says the primary reason many people struggle is that workplace pensions are no longer a common benefit. As a result, millions of Americans are unprepared for retirement. In fact, according to the Federal Reserve's Survey of Consumer Finances, 43% of Americans aged 55-64 do not have retirement savings. Sanders explains that when Americans did have pensions they could rely on, it enabled them to have a guaranteed retirement income without having to have sophisticated investment knowledge. 

Sanders believes in required retirement plans

In addition to expanding Social Security so that seniors have more money to live on, Sanders recommends that businesses in America provide retirement plans for their workers or give them the option to contribute to a pension plan, similar to what federal employees have. This, he explains, can help ensure that Americans have enough money to live on in retirement and can reduce the number of senior citizens who live in poverty. After all, workers who contribute to 401(k) plans must do so voluntarily, and sometimes workers are unable to put more money towards retirement plans because they must manage rising present-day living expenses.

Sanders raises red flags about 401(k) policies

At the end of 2025, Sanders, along with other legislators, including Senator Elizabeth Warren, expressed concerns about a recent executive order by President Trump that would allow alternative investments, such as cryptocurrency, in 401(k) plans. Sanders and Warren argued that adding these options to 401(k) plans was not in consumers' best interests and called on the SEC to explain how the agency will keep Americans' retirement funds safe. Their concern is that many consumers might purchase these investments without understanding the risk or underlying volatility.

Retirement should mean security

One of Sanders' concerns about 401(k)s is that a consumer's retirement balance depends on factors such as how the market fares and the types of investments a worker chooses. He says that saving for retirement should be stable and predictable, not one that is based on the whims of the market.

That's why Sanders is so against allowing private equity and cryptocurrency in 401(k)s, because those investments have been volatile. Additionally, he argues that these investments may come with significant fees that workers might not be aware of and can cut into their retirement terms.

The "Pensions for All" Act

In order to help Americans be better prepared for retirement, Sanders drafted a "Pensions for All" Act. The goal is to create more security in retirement by requiring companies to provide pension plans for their employees. Pension plans traditionally have been more predictable retirement plans, but the number of jobs that offer pensions has lessened over the past few decades. This bill is something Sanders is proposing in addition to his goal of expanding Social Security benefits.

The result of inequality

Ultimately, Sanders' core message is that the 401(k) ecosystem amplifies inequality, especially when comparing CEO salaries with average working salaries. He believes that retirement was more in reach for Americans 50 years ago, when more workers had access to pension plans. He says that 401(k)s today benefit the wealthy and that lower-income workers are at a disadvantage with this system.

Sanders' ultimate goal

Ultimately, Sanders' goal is to protect American workers and ensure that more people are able to meet their retirement goals. He believes that when Americans put in a lifetime of work, they should be able to retire with dignity. In recent statements, he highlights the problems he has with wealth inequality and income inequality and how it negatively impacts Americans' ability to retire. Sanders doesn't think that a country as wealthy as America should have so many seniors living in poverty due to limited access to retirement plans.

Bottom line

Bernie Sanders is a critic of the current 401(k) retirement plan system. He is an advocate for the millions of Americans who rely on these plans to retire comfortably. Whether or not new 401(k) policies will be passed is still unclear. Until then, Sanders will undoubtedly continue to highlight the inequalities within the American retirement system.