Donald Trump Announces Federal Matching Contributions to Retirement Accounts for Millions of Americans

The Donald Trump administration plans a comprehensive transformation of the American retirement system, focusing on employees of small businesses that do not offer traditional 401(k)-type plans. The new initiative, described by the president as a program for the "forgotten workers," aims to democratize access to secure financial instruments by opening a federal trust fund to the private sector. The plan stipulates that the government will reward citizens' savings activity: for every contribution to an individual account, the state will match the amount, with a maximum annual match of $1,000. According to White House estimates, up to 54 million Americans could benefit from this solution, representing a significant portion of the U.S. workforce. The American retirement system underwent a profound transformation in the late 1970s with the introduction of section 401(k) of the tax code. This marked a shift away from stable, company-guaranteed funds towards individual responsibility and stock market investments, which consequently deepened wealth inequality among seniors. However, Trump's proposal is generating numerous controversies among economists and capital market analysts. Bloomberg experts recall the failure of a similar project called myRA, launched in 2014 by the Barack Obama administration. That program, although also targeting low-income individuals, was terminated in 2017 due to minimal public interest and high operational costs. Critics also note that many assumptions of the current plan replicate mechanisms contained in the bipartisan SECURE 2.0 Act of 2022, including the so-called "Savers Match," which is set to take effect in 2027. Trump, however, aims to give the reform his own political stamp by planning its implementation through executive orders, which would accelerate the opening of accounts. „Next year, my administration will give these often forgotten American workers -- great people, the people that built our country -- access to the same type of retirement plan offered to every federal worker.” — Donald TrumpAn additional challenge for the new initiative is the fact that the poorest citizens often have no financial surplus to allocate to long-term savings, even with the promise of a government bonus. Furthermore, skeptics point to potential conflicts with state systems; states such as California and Oregon have already established their own automatic savings programs for private-sector workers. The Trump administration hopes, however, that the authority of the federal government and the scale of the matching contributions will attract millions of people who have so far remained on the margins of retirement security. The final shape of the regulations will depend on the government's ability to finance these matches without excessively burdening the budget deficit and on potential legal disputes regarding the president's authority to independently create such extensive financial instruments. 54 mln — Americans lack access to retirement plans New reports suggest that to avoid Obama's mistakes, the administration is considering implementing automatic enrollment in the program, which typically drastically increases participation rates. The plan envisions that fund management will be handled by the Federal Retirement Thrift Investment Board. The work schedule is ambitious and assumes that the first citizens will be able to open new accounts as early as January 2027.