President Donald Trump used his nearly two-hour State of the Union speech to unveil a proposal that would expand savings opportunities to millions of workers who currently lack access to employer-backed retirement plans.
Newsweek contacted the White House via email outside of regular working hours for comment.
Why It Matters
According to AARP, a nonprofit focusing on issues affecting older people, around 56 million private-sector workers are employed by companies that do not offer an employer-sponsored retirement plan. A 401(k)—a common U.S. workplace retirement account—allows employees to contribute a portion of their paycheck, often with tax advantages, and many employers match part of those contributions. Over time, the funds are invested and typically withdrawn in retirement.
While Trump touted gains in traditional 401(k) accounts during his administration, he argued that too many Americans remain shut out of workplace plans that offer employer matching contributions—a benefit widely seen as key to building long-term savings.
What To Know
In his address, Trump said millions of private-sector employees work for companies that do not provide retirement plans with matching contributions.
“To remedy this gross disparity, I am announcing that next year my administration will give these oft-forgotten American workers, great people, the people that built our country, access to the same type of retirement plan offered to every federal worker, we will match your contribution with up to $1,000 each year,” Trump said.
The accounts would be modeled on the federal government’s Thrift Savings Plan, which provides retirement savings options for federal employees.
According to Bloomberg, the White House intends to rely on an existing “Savers Match” created under the SECURE 2.0 Act, which was signed into law in 2022. The mechanism would be used to provide an annual $1,000 federal match for eligible low-income workers.
The proposal builds on earlier Republican-backed initiatives. Lawmakers last year passed the One Big Beautiful Bill Act, which established “Trump accounts,” a savings vehicle for children. Under the program, the Treasury Department provides a $1,000 credit for U.S. citizens born between 2025 and 2028, and families can contribute up to $5,000 annually.
Retirement Savings Gaps Persist
The announcement comes amid growing concern over Americans’ preparedness for retirement.
A recent study by the National Institute on Retirement Security found that savings levels remain modest for many workers. Among those with any defined contribution retirement savings, the median account balance stood at $40,000 as of December 2022. When workers without any retirement savings were included, the median balance fell sharply to just $955.
The report also underscored access as a major obstacle. Nearly half of U.S. workers were not participating in an employer-sponsored retirement plan, it found.
“The bottom line is that if Americans are not saving for retirement through their employer, then they are probably not saving at all,” the report said.
A separate 2024 analysis by Pew examining projected retirement income gaps found that millions of Americans were likely to miss their savings goals. The research estimated that many households, especially those with low and middle incomes, would encounter ongoing yearly shortfalls between the income they are expected to need in retirement and the amount they are on track to generate.
Pew also noted that the bulk of retirement savings in the U.S. is accumulated through employer-sponsored plans, leaving workers without access to such programs at significantly greater risk of entering retirement with limited financial stability.
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