President Donald Trump signed an executive order on Thursday designed to broaden workers’ access to retirement plans if their employers don’t supply them.
As part of the executive order, the Trump administration announced plans to match contributions to a retirement plan for up to $1,000 a year for eligible lower-income workers who lack an employer-provided retirement plan. The executive order builds on the Saver’s Match of the SECURE 2.0 Act, which gives workers a 50% refundable match on up to $2,000 annually in retirement contributions for eligible workers making under $35,500 and will go into effect in January 2027. The order did not fully address how the $1,000 would be funded.
The Treasury Department will be directed to launch TrumpIRA.gov, a website where workers could enroll in a private-sector retirement plan and allow them to have diversified, index-based investments, in line with the Thrift Savings Plan for federal workers.
The plan would not interfere with state plans, such as those in California and Illinois, that mandate auto-IRA programs for employers without private retirement plans. Semafor first reported that the executive order provides guidance to philanthropic donors who choose to contribute to IRAs, and notes future efforts to automatically enroll workers and further expand eligibility.
The Economic Innovation Group found that 42% of Americans who work full-time don’t have access to a retirement plan. The White House previously estimated the new policy would make 56 million workers eligible. People with 401(k)s have likely experienced major gains as the market hits record highs.
Trump first addressed the proposed expansion of retirement savings in his State of the Union address in February.
In interviews with hundreds of older adults, many of whom don’t have pensions and rely on Social Security, Business Insider found that the social safety net isn’t enough. Many don’t have sufficient retirement savings, often due to high medical bills, static wages, or the lack of an employer-sponsored 401(k).
Teresa Ghilarducci, director at the Wealth Equity Center at The New School for Social Research, wrote in a statement, “Getting 56 million workers into an account with a real federal match is the largest potential expansion of retirement coverage since Social Security.”
Though the extra money could come in handy, Romina Boccia, director of budget and entitlement policy at the Cato Institute, said that these spending commitments may not actually address the financial problems of lower-income Americans.
Business Insider spoke with hundreds of workers in their 80s and 90s last year, many of whom never worked jobs that offered a retirement plan. Some were worried that their Social Security checks could get cut if the trust fund indeed runs out in the 2030s.
Back in February, Stephen Kates, a financial analyst at Bankrate, said, “While Traditional and Roth IRAs are available to those without employer coverage, these accounts can feel intimidating for individuals who are less confident in managing their finances. A government-administered plan established through an election on an annual tax return could lower the barrier to entry and provide a visible incentive to contribute through a matching benefit.”
