TrumpIRA.gov: A New Retirement Savings Option for Workers Without a 401(k)
With high inflation, high gas prices, and high mortgage rates, it’s no wonder Americans feel like saving for the future is currently an uphill battle. Financial anxiety is up, and many Americans are cutting back on their 401(k) contributions. But for millions of American workers, the problem is even graver: they don’t have access to a workplace retirement plan at all.
President Trump says he has a plan to address this problem.
During his February State of the Union address, Trump introduced a new retirement savings proposal for workers who’ve been left out of the traditional retirement system. And on April 30, he signed an executive order directing the Treasury Department to launch a new website next year called TrumpIRA.gov. The goal is to give workers without employer-sponsored retirement plans easier access to low-cost retirement accounts.
A Substantial Retirement Gap
Approximately 56 million Americans currently do not have access to a workplace retirement plan. And for many, opening an IRA on their own can feel confusing, expensive, or easy to put on the back burner. Add in the fact that some investment platforms require minimum balances, and smaller savers can easily get discouraged.
This new proposal from Trump seeks to remove some of those barriers.
According to the executive order, the IRA providers listed on TrumpIRA.gov must keep costs low. The annual expense ratio, including management fees, operating costs, and administrative expenses, cannot exceed 0.15% of an account balance. The provers also cannot require minimum contributions or minimum account balances. This is a win for lower-income workers starting with small balances.
Similarities to the Federal Thrift Savings Plan
In Trump’s State of the Union address in February, he said workers who don’t have a workplace retirement plan would be able to “access the same type of retirement plan offered to every federal worker.”
He was referring to the Thrift Savings Plan, which is the retirement system used by federal workers. It’s viewed as one of the lowest-cost retirement savings programs available. The intention of Trump’s proposal is to offer similar investment access to private-sector workers who lack workplace retirement benefits.
Starting next year, eligible workers would be able to visit TrumpIRA.gov, open an IRA account, and begin investing.
Enter the Federal Savers Match
One of the biggest benefits integrated into the proposal is the upcoming Federal Savers Match program. This is a provision in Secure 2.0, the Biden-era legislation that was signed into law in 2022.
Starting in January 2027, the provision will offer a match for workers earning less than $35,500 per year (or for married couples earning less than $71,000).
Eligible workers who save up to $2,000 per year could receive a federal match of up to $1,000. Married couples saving up to $4,000 could receive a match of up to $2,000.
For workers who live paycheck to paycheck, even small matching contributions can add up and make a difference over time.
Why Retirement Savings Are Crucial Right Now
According to a recent study by Northwestern Mutual, Americans now believe they need $1.46 million to retire comfortably, which is roughly $200,000 more than last year’s estimate. This study also found that 46% of Americans do not expect to be financially prepared for retirement. And 48% believe there is a real chance they could outlive their savings.
At the same time, thanks to inflation and rising living costs, some Americans are lowering their 401(k) contributions.
This is why expanding access to retirement funds is so important right now. A simple, lower-cost way to save could help millions of American workers build long-term financial security.