Trump Administration’s New Retirement Savings Proposal

March 26, 2026

In his State of the Union address on February 24, President Trump proposed a new federally backed retirement account with up to a $1,000 government match for workers who do not have access to an employer-provided plan, which he said would be similar to those “offered to every federal worker.” The Administration has yet to release a detailed proposal but has signaled that the White House is planning to issue an Executive Order on the concept in the near future. Will the new accounts be integrated with Social Security (SS)? Will Congress need to approve? And – when considered in conjunction with the so-called “Trump Accounts,” which are a new type of traditional individual retirement account for eligible minors approved in 2025 – does this latest proposal suggest the beginnings of a federal personal-account system that could evolve into partial privatization of Social Security, or be used as an argument against raising SS benefits as part of any future reform effort?

President Trump said in his State of the Union speech that “half of all of working Americans still do not have access to a retirement plan with matching contributions from an employer.” This is why he wants to create a new program that will “match your contribution with up to $1,000 each year, as we ensure that all Americans can profit from a rising stock market.”

The President is generally correct. For example, The Economic Times says roughly 40.6 million full-time private-sector workers –- “approximately half of all working Americans” — have “zero access to an employer-matched retirement plan, according to the bipartisan Economic Innovation Group.” Furthermore, for part-time workers, that number jumps to 79 percent, the publication states. AARP reports an even higher number, stating that their own research finds that 56 million workers lack access to such plans through their employers, “especially small-business employees, low-income employees and workers of color.”

For example, AARP says that 78 percent of businesses with fewer than ten employees do not offer an employer-based retirement plan, and “almost 80 percent of the workers who lack access to an employer-based retirement plan make less than $53,000 per year.” Finally, AARP finds that, “When it comes to non-white employees, about 63 percent of Hispanic workers, 52 percent of Black workers and 44 percent of Asian American workers are missing out on a retirement vehicle through their employers.”

It is true that some states have moved to fill this coverage gap, as Tony Roda, a Principal with the DC law firm of Williams & Jensen – a valued NCTR Commercial Associate member – points out. In fact, 20 states have created state-facilitated retirement plans for private sector workers, with 15 of those plans being auto-IRAs, according to the Georgetown Center for Retirement Initiatives. Thus far, Roda says, the state-facilitated plans cover about 375,000 employers and have aggregate assets under management of $2.85 billion. But “while this is a significant contribution to closing the coverage gap, the problem persists,” he says.

As noted above, the Administration has yet to release a specific proposal, but here are some reported details, based on senior Administration officials and other sources:

According to a White House official, the President’s proposal would provide a new retirement savings vehicle — a “universal, portable” account — for low- and middle-income workers without access to employer-based defined contribution plans.
If, as widely reported, the proposal uses the existing “Saver’s Match” framework created under the SECURE 2.0 Act, signed into law in 2022, it will provide a federal match to eligible persons of 50 percent of retirement contributions up to $2,000 for individuals ($1,000 match) or $4,000 for those married filing jointly ($2,000 match).
Under the existing Saver’s Match, the credit begins to phase out between $20,501 in annual income for individuals and is fully phased out at $35,500; the phase-out range for those married filing jointly is $41,001 to $71,000 of annual income. However, full eligibility criteria for the new program have not yet been fully published.
It may therefore be possible to create the new retirement savings accounts and the federal governmental match simply by regulation and through existing federal law, according to Mr. Roda. This is reportedly being explored at the White House and Treasury Department.
A White House official told Axios that the new accounts will be similar to one offered to federal employees called the Thrift Savings Plan (TSP), which offers access to a handful of low-fee funds that invest in short-term Treasuries and the S&P 500 index, but the Administration has not released detailed design parameters such as investment options, withdrawal rules, governance, and fiduciary standards. Thus, it is not clear if the governance structure will be a TSP-like board, Treasury-managed, or run by private asset managers.
Axios also reports that Instead of the need for a participant to open up an Individual Retirement Account (IRA) on their own in order to take advantage of the new retirement savings account — “a hurdle most don’t take,” the publication observes — they would “just check a box on their tax form to get things started” according to Teresa Ghilarducci, a progressive labor economist at the New School who is familiar with the plan.
It appears – at least for now — that there is no plan to integrate these accounts with Social Security.

[NB: There may be a challenge to the immediate use of the Saver’s Match to deliver the federal match called for by President Trump, according to Mr. Roda. That is, while contributions to a Roth retirement account will make an individual eligible for the match, current law says the match may not be paid to a Roth account but may only be made to a traditional (pre-tax) retirement account, he explains. But Roda also believes this problem is likely to be fixed by Congress in the next retirement legislation that clears the Hill.]

This new retirement proposal comes fast on the heels of the new “Trump Accounts” that were approved as part of 2025’s One Big Beautiful Bill Act (OBBBA). These are described by the Internal Revenue Service (IRS) as “a new type of traditional individual retirement account for eligible minors.”

On March 6, the IRS issued proposed regulations for the Trump Accounts and the Trump Account Contribution Pilot Program, which provide that, in order for an eligible child to receive a $1,000 pilot program contribution, an election must be filed by an individual — typically a parent or guardian — who anticipates the child will be his or her qualifying child for the year during which the election is made, and is known as the pilot program-electing individual. “Therefore, parents who want to participate need to make an election and may be in a situation to do so during the tax year in which the child is born,” the IRS explains, underscoring that elections for pilot program contributions may be made as soon as the child meets all eligibility criteria.

Eligible Children: In order for a child to receive the pilot program contribution, the parent or other individual who qualifies to make the election, must also elect to establish a Trump Account for the child, who must:

Be born in calendar year 2025, 2026, 2027, or 2028;
Be a United States citizen;
Have been issued a Social Security Number; and
Be someone for whom no prior pilot program election has been made by any individual and processed by Treasury.

Families, friends and employers can contribute, combined, up to $5,000 per year per child, and the funds will be invested in a diversified portfolio of low-cost index funds designed to maximize long-term growth while minimizing risk. Funds can be accessed without penalty when the child turns 18 for qualified expenses like education, a first home purchase, or starting a business. Withdrawals may be subject to restrictions and would be taxed at ordinary income rates. Finally, Trump Accounts for eligible children can be opened using IRS Form 4547 when a parent or guardian files their taxes or by filling out the online form on TrumpAccounts.gov.

However, when the new Trump Accounts began being described in the media as individual, market‑invested accounts (Treasury called them IRAs), with government “seed” contributions and mandatory investment in U.S. equity index funds, some observers began seeing troubling similarities to the 2005 Bush Social Security personal‑account debate, echoing the framing of “personal accounts,” “ownership of retirement savings,” and “market‑based growth” from that controversial proposal.

And when Treasury Secretary Bessent explicitly called Trump Accounts a “back door for privatizing Social Security,” Democrats and Social Security defenders – already concerned that the accounts resembled earlier personalization efforts — immediately seized on the comment. “A stunning admission,” Senate Democratic leader Chuck Schumer said in a Senate speech. “Bessent actually slipped, told the truth: Donald Trump and his government want to privatize Social Security,” he continued.

AP coverage of the incident reported that Democrats warned that Bessent’s comments showed that Republicans want to shift the government-run program to a private one and are again trying to dismantle Social Security, with Tim Hogan, a spokesperson for the Democratic National Committee, charging that the Administration “is scheming to privatize Social Security.”

The Treasury Department later issued a statement that said, “Trump Accounts are an additive government program that work in conjunction with Social Security to broaden and increase the savings and wealth of Americans. Social Security is a critical safety net for Americans and always will be.”

Interestingly, there has not been the same kind of outcry about the new retirement savings proposal made in Trump’s State of the Union address, probably due to the fact that the new retirement‑match proposal is framed very differently, with the White House emphasizing this was to be seen as adding a supplemental savings option with matching contributions modeled on the federal TSP, and not integrated with SS. In short, the way it has been framed is not reminiscent of personal Social Security accounts.

Equally important is the fact that Democrats generally support expanding retirement access, and the proposal is framed as closing the retirement-plan access gap, not restructuring Social Security. In addition, auto‑IRAs, pooled employer plans, and universal savings accounts have all received bipartisan support in the past.

However, there are still structural similarities to personal accounts, with both Trump Accounts and the new proposal involving parallel system risks. Specifically, if large numbers of workers shift savings into federally backed personal accounts, might not this create political pressure to redirect payroll taxes into similar structures in the future? On the other hand, the new accounts would appear at this early stage to be separate from Social Security and voluntary, not funded by payroll taxes.

Nevertheless, it is also possible that when Congress turns to the reform of the Social Security program, opponents of increasing SS benefits could point to these two new “supplemental” programs as reducing the need for such.

As if there were not enough things to worry about in Washington, DC. Something to keep in mind.