Workers without a 401(k) could get $1,000 a year from the government under Trump’s plan

New accounts target workers without 401(k)s

President Trump used his State of the Union address on Feb. 25 to announce a plan that could change how millions of Americans save for retirement.

The proposal would create new savings accounts for private-sector workers who don’t have access to a 401(k) through their job. The federal government would match what workers put in, up to $1,000 a year.

About 56 million workers fall into that gap right now, according to Pew Charitable Trusts research.

Accounts follow a federal employee model

The new accounts would work like the Thrift Savings Plan (TSP), the retirement program that federal employees and military members already use.

The TSP keeps things simple with a handful of low-cost index funds covering government bonds, U.S. stocks, and international stocks.

The White House said these new accounts would be “universal” and “portable,” so workers could carry them from one job to the next.

Fees would stay low, and the investment options would track indexes rather than charge for active management.

Signing up could be as easy as filing taxes

Teresa Ghilarducci, a labor economist at the New School who knows the plan well, said workers would sign up by checking a box on their tax form. That’s a big deal.

Research shows workers are 15 times more likely to save when the money comes straight out of their paycheck.

The White House hasn’t confirmed whether the plan would automatically enroll workers, but policy experts say auto-enrollment is the single most important feature for reaching people who wouldn’t sign up on their own.

The plan builds on a bipartisan 2022 law

Trump’s proposal expands on the SECURE 2.0 Act, a bipartisan law President Biden signed in 2022. That law already created something called the Saver’s Match, set to kick in during 2027.

Under the Saver’s Match, the federal government will match 50% of a worker’s retirement savings, up to $2,000 a year.

That means a worker could get up to $1,000 in matching funds, or $2,000 for married couples filing jointly.

Income limits determine who qualifies for matching

The Saver’s Match comes with income caps. Single filers earning less than about $20,500 a year would get the full 50% match.

The match shrinks as income rises and disappears entirely above about $35,500.

For married couples filing jointly, the full match covers those earning under about $41,000, and it phases out above about $71,000.

The government plans to adjust these thresholds for the cost of living after 2027, according to a Congressional Research Service report on the program’s eligibility rules.

Nearly half of workers have no retirement plan

Close to half of all private-sector workers in the U.S. have no retirement plan through their employer. Small businesses drive much of that gap because many can’t afford to set up and run a plan.

A February 2026 report from the National Institute on Retirement Security paints a stark picture: the typical American worker has less than $1,000 saved for retirement.

Even among workers aged 55 to 64, those closest to retirement, the median savings sits at just $30,000.

Both parties have pushed for broader access

Expanding retirement savings has had support on both sides of the aisle for years. The SECURE 2.0 Act passed with bipartisan votes in 2022.

Kevin Hassett, now Trump’s National Economic Council Director, co-wrote research in 2021 with Ghilarducci on building a TSP-style plan for private-sector workers.

Congress reintroduced the Retirement Savings for Americans Act in 2025, a bipartisan bill that would create portable accounts with auto-enrollment.

Sen. Elizabeth Warren, a Democrat, applauded the retirement announcement during the address.

Seventeen states already run their own programs

Some states didn’t wait for Washington. Seventeen states have passed laws creating automatic retirement savings programs for workers whose employers don’t offer a plan.

These auto-IRA programs enroll workers automatically and pull savings from their paychecks.

As of January 2026, about 1.2 million workers had signed up nationwide, according to Pew Charitable Trusts data on state programs. Workers can opt out or adjust their contributions at any time.

Once the Saver’s Match starts in 2027, those workers could also get federal matching funds on top of what they’re already saving.

The TSP keeps costs low for federal workers

Congress created the TSP in 1986, and it works a lot like a private-sector 401(k).

Federal employees under the Federal Employees Retirement System get an automatic 1% contribution from their agency, even if they put in nothing themselves.

Workers who contribute 5% of their pay get up to an additional 4% match, bringing the total government contribution to 5%. The TSP is known for charging far lower fees than most private-sector plans.

Workers can choose between traditional pre-tax or after-tax Roth contributions.

Key details still need to be worked out

The White House said it could carry out parts of the plan using existing powers, but the full proposal would likely need Congress to pass new legislation.

Treasury Secretary Scott Bessent suggested lawmakers could use reconciliation, the same budget process behind other major spending bills, to get it done.

Several big questions remain open: how enrollment would work, how the accounts would be taxed, and whether workers could make emergency withdrawals. The White House promised more details soon.

Not everyone thinks the plan will deliver

Some policy experts questioned whether the White House can fund a $1,000 match without Congress approving the money first.

Others pointed out the proposal looks a lot like what the SECURE 2.0 Act already set in motion under Biden.

Critics at the Cato Institute argued Americans need a simpler savings system, not another type of tax-advantaged account. Supporters counter that even small matching funds could push millions of workers to start saving.

Ghilarducci estimated only about half of low-income workers may open an account, since younger and lower-paid workers often face more pressing financial needs.

What this means if you dont have a plan

If you already have a 401(k) or another employer plan, this proposal probably won’t change much for you.

But if your job doesn’t offer a retirement plan and you earn below the income limits, you could eventually get up to $1,000 a year in free federal matching funds.

The Saver’s Match is already on track to begin in 2027 for workers who contribute to an IRA or qualifying account. Trump’s plan goes further by creating the accounts for workers who don’t have one yet.

This is still a proposal, not law, and the final details could shift as Congress weighs in.

This article was created with AI assistance and human editing.

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