Trump Proposes Federal-Match Retirement Accounts
Former President Trump has proposed "Universal Savings Accounts" for workers without employer-sponsored 401(k) access, featuring federal matching contributions similar to employer matches. The plan could help millions of lower- and middle-income workers build retirement security, especially gig workers and those in small businesses. Details on eligibility, match limits, and rollout are still being debated, but could become a significant new option if enacted.
- The proposed accounts would be modeled after the federal government's Thrift Savings Plan (TSP), a low-cost, index-based defined contribution plan available to federal employees. This plan would also be portable, meaning the account stays with the worker from job to job. - The concept builds on the bipartisan SECURE 2.0 Act signed in 2022, which created a "Saver's Match" program scheduled to start in 2027. That program provides a 50% federal match on the first $2,000 saved by low- to middle-income workers, for a maximum match of $1,000. - Approximately 54 to 69 million American workers lack access to an employer-provided retirement plan, representing a significant gap in retirement savings opportunities. According to one analysis, 42% of full-time private sector workers did not have access to a retirement plan in 2024. - The problem is most acute for lower-income earners; nearly 79% of full-time workers earning less than $27,400 a year do not have access to a workplace retirement plan. - Bipartisan efforts to address this coverage gap have been ongoing. The Retirement Savings for Americans Act (RSAA), for example, has been introduced in Congress multiple times and proposes establishing the American Worker Retirement Plan with federal matching contributions. - Some critics have questioned how the proposed federal match would be funded and whether the administration has the fiscal authority to implement it without congressional approval. - While many workers can open an Individual Retirement Account (IRA), these are often underutilized, partly due to the lack of an employer match, a feature the new proposal aims to replicate with government funds. - The median retirement savings for all American workers is just $955, and for those nearing retirement (ages 55-64), the median amount saved is only $30,000.
