Trump Unveils New Retirement Savings Program with Government Matching Funds

President Trump announced a new retirement savings initiative during his State of the Union address that would provide government matching contributions up to $1,000 annually for workers without employer-sponsored plans. The program aims to help nearly 54 million American workers who currently lack access to workplace retirement benefits.

During his State of the Union speech on Tuesday, President Donald Trump revealed a new initiative designed to help millions of Americans build their retirement nest eggs, particularly targeting workers who don’t have access to workplace retirement benefits.

The proposed program would provide government matching contributions of up to $1,000 each year for eligible participants, potentially benefiting tens of millions of Americans who currently struggle to save for their golden years.

The Scale of America’s Retirement Challenge

Recent data from the National Institute on Retirement Security reveals a stark picture: half of all American workers between ages 21 and 64 have saved $955 or less for retirement. Even among those with employer-provided plans like 401(k)s, half have accumulated less than $40,000.

These figures fall dramatically short of what experts say is needed. A 2025 BlackRock survey found that respondents believe they need $2 million for a comfortable retirement. BlackRock CEO Larry Fink noted in his annual investor letter that “Almost no one is close” to reaching that goal.

The situation is particularly concerning for Generation X workers, ages 46 to 61, with 62% having saved less than $150,000 despite approaching retirement age.

Many younger workers postpone retirement contributions due to student loan payments or saving for home purchases, but this delay can prove extremely expensive since early contributions have more time to grow tax-free.

Who Would Benefit from the New Program?

Research from the Economic Innovation Group indicates that nearly 54 million American workers have no access to employer-provided retirement plans. Additionally, 63 million people lack access to employer matching contributions, which financial advisors often call the “only free lunch in investing.”

Details of Trump’s Proposal

The president’s plan includes two main components. Workers without employer-sponsored retirement plans would gain access to a program similar to the Thrift Savings Plan currently available to federal employees. The government would then match employee contributions to both these new plans and existing employer plans that don’t offer matching, providing up to $1,000 annually.

The plans would feature an array of low-cost index funds for investors to choose from. Craig Bolanos, co-founder of VestGen Wealth Partners, says this makes them more attractive than previous attempts like the MyRA accounts.

Any expansion of the matching amount would require Congressional approval.

Previous Presidential Efforts

This isn’t the first time a president has addressed retirement savings in a State of the Union address. In 2014, former President Barack Obama introduced MyRA accounts overseen by the Treasury Department, which allowed after-tax contributions with principal protection. However, these accounts failed to gain traction and were eliminated by the first Trump administration in 2017.

Under legislation signed by former President Joe Biden in 2022, low- to moderate-income households will qualify starting next January for government matching of 50% of their retirement savings contributions, up to $1,000 annually.

Why Not Focus on Social Security Instead?

Most Americans rely on Social Security for the majority of their retirement income, but the program faces sustainability challenges. Projections show that reserves helping cover program costs will be depleted by 2033, with ongoing payroll taxes expected to cover less than 80% of current benefit levels.

Addressing this shortfall would likely require politically difficult choices such as raising the eligibility age, reducing benefits, or limiting payments to lower-income Americans. As BlackRock’s Fink has observed, Social Security serves as a safety net rather than a path to financial security.

Potential Obstacles

The proposal currently lacks specific implementation details. The administration will need to build public awareness and make participation simple, as research shows that easier or automatic saving programs see higher participation rates.

However, questions remain about whether lower-income Americans facing other financial pressures will be able to contribute. Catherine Valega from Green Bee Advisory notes that “Most of them are not flexible with their cash flow to even consider putting money aside.”

Additional concerns include the cost to the government, which already operates with a substantial budget deficit, and whether more efficient approaches might exist, such as strengthening Social Security.

Industry Response

Some financial professionals welcome the initiative. Michael Lofley, a financial advisor at HBKS in Florida, reports that one of his clients, a small business owner who already provides a 401(k) plan to his 10 employees, is considering adding these new accounts and related “Trump accounts” for his employees’ children as part of his benefits package.