President Donald Trump has proposed a new government-backed savings account designed to address a "gross disparity" in America's retirement system. The plan targets the approximately 56 million Americans lacking access to employer-sponsored retirement plans like 401(k)s.
The proposed accounts would be modeled after the Thrift Savings Plan available to federal workers and would follow individuals from job to job. The federal government would offer matching contributions of up to $1,000 annually, with private philanthropists also able to contribute.
This initiative builds upon the Secure Act 2.0, signed in 2022, which established a Saver's Match program set to launch in 2027. The proposal comes amid a significant retirement savings gap, with many Americans far from the estimated $824,000 needed for a comfortable retirement. Lower-income workers are disproportionately affected, with a high percentage lacking any retirement plan access.
While the future of Trump's proposal remains uncertain, individual retirement accounts are available now for those with earned income, and consistent contributions can lead to significant compounding growth.