President Trump announced during his State of the Union address Tuesday night plans to offer Americans access to a retirement account similar to those available to federal workers.
Why it matters: There are roughly 50 million Americans without employer-sponsored retirement plans, like 401(k)s, and there's been growing bipartisan interest in expanding access.
What he's saying: Trump said he would offer Americans who don't have 401(k)s or other employer-based retirement accounts "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," he said.
How it works: The White House says it's expanding on an existing law passed under former President Biden called the Secure Act 2.0 (which is an update of a law passed during Trump 1.0).
- A piece of it takes effect next year and would offer workers who already have retirement accounts up to $1,000 in matching funds if they contribute $2,000 on their own.
Zoom in: A White House official tells Axios that it would be similar to one offered to federal employees called the Thrift Savings Plan, which offers access to a handful of low-fee funds that invest in things like short-term Treasuries and the S&P 500 index.
State of play: The White House now wants to set up retirement accounts for people who don't already have one.
- Instead of these folks opening up an IRA on their own — a hurdle most don't take — they would just check a box on their tax form to get things started, says Teresa Ghilarducci, a progressive labor economist at the New School who is familiar with the plan.
"This is a big deal," Ghilarducci says. "It finally recognizes that most people don't have anything saved for retirement, and they don't save consistently."
- She worked on an early version of this plan with White House economic adviser Kevin Hassett in 2021.
- "The idea was to get someone far on the right and far on the left to come together," she says.
Zoom out: The idea is part of a broader push by the White House to get more Americans invested in stocks, and comes on top of its new Trump accounts, a way to get kids into the markets as young as possible.
The intrigue: A White House official tells Axios that as with Trump accounts for kids, philanthropic interests will be able to contribute.
Yes, but: The one big looming threat to people's retirement savings is still on deck — the Social Security trust fund is set to be depleted in 2033, at which point recipients would see a steep cut if Congress doesn't act.
- "There's still more to be done," Ghilarducci says.
What to watch: Keep an eye out for more details. Retirement experts tell Axios that even the most well-intentioned plans can go sideways.
Editor's note: This story has been updated with additional details.
