Millions of workers without access to a 401(k) or other workplace retirement plan could get a new way to invest — and an annual government match of up to $1,000 — under a proposal from President Donald Trump.
“Half of all of working Americans still do not have access to a retirement plan with matching contributions from an employer,” Trump said during his State of the Union address Tuesday. “To remedy this gross disparity, I’m announcing that next year my administration will give these often-forgotten American workers … 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 as we ensure that all Americans can profit from a rising stock market.”
Roughly 56 million Americans lack access to an employer-sponsored retirement plan at work, according to 2025 research from the Pew Charitable Trusts, an independent public policy nonprofit.
It’s unclear exactly how Trump’s proposal would come to fruition, and what final form it would take. Speaking to reporters on Tuesday, Treasury Secretary Scott Bessent suggested the law could be passed through reconciliation — the same process the One Big Beautiful Bill Act underwent. Key provisions of that legislation shifted as it moved between the House and Senate.
How the new retirement accounts would work
President Donald Trump delivers the first State of the Union address of his second term to a joint session of Congress in the House Chamber of the Capitol in Washington, Feb. 24, 2026.
Kenny Holston | The New York Times | Via Reuters
The Trump administration plan would provide a universal savings account to workers, which would be portable if they switch jobs.
The new accounts would work similarly to the Thrift Savings Plan, or TSP, a retirement savings and investment plan for federal employees that includes a government match and low-cost, index-based investment choices, according to the White House.
How the proposed savings accounts will be taxed remains to be seen, but if they follow the TSP model, contributions could be made on a tax-advantaged basis. Under a traditional TSP, contributions count against income for an up-front tax break, while investors in Roth TSPs contribute post-tax money and can make tax-free withdrawals in retirement.
Current TSP plan participants receive matching contributions from the federal government equal to up to 5% of the employee’s salary.
The $1,000 matching contributions in the president’s proposal may involve pairing the new accounts with the Saver’s Match, a provision in Secure 2.0 that takes effect in 2027, according to White House officials. Starting that year, workers under certain income thresholds can earn a 50% matching contribution from Uncle Sam on up to $2,000 in annual retirement savings.
Which workers are ‘left out of the system’
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Trump’s proposal is “a recognition of reality,” said Teresa Ghilarducci, a professor at The New School who co-authored 2021 research with National Economic Council Director Kevin Hassett on providing low-income workers with retirement savings similar to the Thrift Savings Plan.
Ghilarducci said the new account would be a “meaningful step to get universal coverage” for retirement savings.
“Many, many people who are left out of the system will start accumulating for retirement,” Ghilarducci said, and can reap the rewards of compound interest.
Low-income workers often lack access to workplace retirement savings plans. Nearly 80% of workers without an employer-sponsored retirement plan earn less than $53,000 per year, according to AARP, a nonprofit, nonpartisan organization representing individuals 50 and over.
Workers at small businesses are more likely not to have a retirement plan at work, as 78% of businesses with fewer than 10 employees do not offer that benefit, AARP research found.
Many of those workers tend to be young, female or minorities, Ghilarducci said.
About 63% of Hispanic workers, 52% of Black workers and 44% of Asian Americans lack access to a retirement savings plan at work, according to AARP.
Key account details yet to be determined
Retirement experts are “cautiously optimistic” that the proposal could be a game changer to help people get access to 401(k) style plans, said Jason Fichtner, senior fellow at the National Academy of Social Insurance, a nonprofit, nonpartisan organization focused on strengthening social insurance programs.
The question is how the plan would work so that everyone has access to it, Fichtner said.
“We need to make sure it’s additive and doesn’t subtract from any of the other social welfare programs we have that help lower-income people,” Fichtner said.
For example, some low-income Americans rely on Supplemental Security Income benefits. However, those beneficiaries face strict asset limits of $2,000 per individual and $3,000 per married couple. The new retirement accounts could be structured so that assets held within them don’t apply to the SSI limits, or Congress could raise those thresholds through broader reform, Fichtner said.
“The most important thing that you can give people and families in our retirement system is an easy way to get started,” said KC Boas, retirement savings initiative lead at the Aspen Institute Financial Security Program, which focuses on helping people at all income levels achieve financial security.
With the new retirement accounts, lawmakers will need to consider details such as how to ensure portfolios are diversified and whether, as with Trump accounts for kids, they will allow outside contributions, she said. That’s in addition to fundamental questions on who the accounts will be for, what features they may have, and how the enrollment process and $1,000 match will work.
They also need to consider whether there will be a liquidity feature to allow for emergency withdrawals alongside long-term savings, Boas said.
“So many retirement accounts today are treated as de facto emergency savings vehicles when they’re not,” Boas said. “And we know the impact that that has on people’s balances at retirement and the setback that it can cause.”
Expanding savings may reduce government burden
Trump’s new retirement plan could draw on other efforts to encourage more workers to save for retirement, experts say.
Currently, 17 states have passed legislation to provide automatic IRA plans that let workers without a retirement plan through their employer set aside money, according to Kim Olson, senior officer for retirement savings at Pew Charitable Trusts.
Of those programs, 15 are active, with Hawaii and Washington expected to launch their programs this year and next year, respectively, she said.
The federal government previously attempted a savings plan called myRA, which enabled participants to participate in a retirement plan through automatic payroll deductions. That was shuttered in 2017 after 18 months. “It wasn’t given enough time to flourish,” Olson said.
Bills proposed in Congress, including the Retirement Savings for Americans Act and Automatic IRA Act, aim to make retirement savings more accessible to workers.
A 2023 Pew Charitable Trusts study found that under-saving by workers could cost state and federal governments $1.3 trillion over 20 years.
Enabling workers to save a nominal amount per month, around $100 to $200, can help mitigate those costs, Olson said. To date, existing state programs have let about 1.17 million savers accumulate close to $2.8 billion in assets over the past eight years, she said.
“Getting as many people as possible access to saving, automatically enrolling them, and having them just putting that money away, is basically the key to mitigating this upcoming huge cost at the national federal level and the state level,” Olson said.
