Trump Retirement Savings Program to Roll Out Next Year

President Donald Trump signed an executive order on Thursday, April 30, aimed at expanding access to retirement savings accounts for Americans without employer-provided programs. Because finding a job that offers a retirement plan is not always easy, Trump is trying to help lower-income families save for their later years. The order could mark a potential turning point for American workers without a safety net.

Retirement Savings Program

"Beginning at the start of next year, every American will be able to go to TrumpIra.gov and open a new low-cost IRA account," Trump said in the Oval Office. "You'll then be able to access the same type of retirement accounts that federal employees enjoy through the Thrift Savings Plans, which are incredible. As part of the Federal Savings Match program, low-income Americans will be eligible to receive up to $1,000 per year in matching funds deposited directly into their accounts."

Instead of creating a new government retirement plan, the executive order directs the Treasury Department to open an online marketplace to help workers find and enroll in private-sector Individual Retirement Accounts (IRAs). TrumpIRA.gov will help workers without employer-provided plans, as long as individuals earn less than $35,000, or less than $71,000 for couples. This is based on 2022 legislation that Congress passed, directing the government to match contributions from low-income workers.

"The great thing for millions of Americans who lack employer-sponsored plans, this will be really revolutionary because they'll be covered," Trump said. "Nobody thought that was possible. For example, if a 25-year-old who is eligible for a Savers Match program invest just $165 a month under the matching federal contributions, they will have an estimated $465,000 in their account by the time they're 65 years old. In other words, they'll be rich. And there's something awfully nice about that."

As Semafor pointed out, “About 54 million people who work full- or part-time do not have access to an employer-provided retirement plan, according to the Economic Innovation Group, while some 27 million who qualify for the Saver’s Match are not enrolled in a plan where they can collect it.”

Will It Be Successful?

In his 2014 State of the Union address, former President Barack Obama talked about his idea for a retirement savings plan, known as myRA. It began in 2015, but shut down just two years later due to low activity, with just 30,000 workers signing up. So what makes Trump’s idea better – and will it be successful?

Obama’s myRA funds were invested only in treasury bonds. While these are safe, they have low returns that can’t always outpace inflation. TrumpIRA.gov encourages private-sector IRAs, which give workers access to diversified and market-based investments, such as stocks and bonds. This is aimed at growing the coffers instead of just preserving the principal.

The president’s initiative also focuses on low-cost plans and is set to have no minimum balance requirements or minimum contributions. The program also integrates with the Saver’s Match legislation, which offers low-income workers up to $1,000. MyRA did not offer a match. Obama’s myRA had a cap of $15,000, whereas Trump’s allows for standard IRS limits of $7,500-plus per year.

TrumpIRA.gov is set to open next year.