How Trump could fund $1K federal match for new retirement plans

President Trump announced a new public retirement plan with federal contributions to ensure all Americans profit from stock market gains.

Starting next year, the federal government will match up to $1,000 in contributions annually in new public retirement accounts available to all American workers, Trump said during his State of the Union address Tuesday night.

“We have millions and millions of people, ‘cause the stock market has done so well, hitting all those records, your 401ks are way up – yet half of all working Americans still do not have access to a retirement plan with matching contributions from an employer,” Trump said Tuesday.

“To remedy this gross disparity, I am announcing that next year, my administration will give these oft forgotten American workers, great people, people who built our country, access to the same type of retirement plan offered to every federal worker.”

The White House did not immediately respond to inquiries about how the federal government will fund the matching contributions or when exactly the accounts will launch next year.

A White House official told Axios that the retirement plans would be similar to one offered to federal employees known as the Thrift Savings Plan, which offers access to low-fee funds that invest in short-term Treasuries and the S&P 500.

National Economic Council Director Kevin Hassett has long pushed for a similar plan, urging lawmakers during the Biden administration to open the government’s Thrift Savings Plan to private-sector workers without employer-matched retirement plans.

The Trump administration might also be looking to launch the accounts without going through Congress by resurrecting former President Barack Obama’s MyRA program, according to a Semafor report.

The short-lived program – which only drew 30,000 participants before it was scrapped by Trump in 2017 – created “starter” accounts with tax advantages similar to Roth IRAs.

A revamped version of the Obama accounts could potentially be paired with the Saver’s Match, a federal matching contribution set to launch in 2027 thanks to the Secure 2.0 Act signed into law in 2022, according to the report.

The Saver’s Match is a significant improvement over its predecessor, the Saver’s Credit, allowing individuals to receive a federal match of up to 50% on the first $2,000 in annual contributions to a workplace retirement plan or IRA. This will start in 2028 based on 2027 tax returns.

Trump also recently said he was “very seriously” looking into Australia’s “superannuation” retirement system, in which employers are required to fund workers’ savings accounts.

It’s just the latest effort from the Trump administration to encourage Americans to save in accounts that track markets.

Since taking the Oval Office for his second term in January 2025, the S&P 500 has gained roughly 15% and the Dow Jones Industrial Average recently broke past the 50,000 mark for the first time.

Starting July 4, parents will be able to open tax-advantaged investment accounts – known as Trump accounts, or 530As – for children under 18 with Social Security numbers.

For kids born from 2025 through 2028, the US Treasury will seed these accounts with $1,000.

A growing number of employers have pledged to match the initial $1,000 contributions, including Bank of America, JPMorgan Chase, BlackRock, Dell Technologies and News Corp, which owns The Wall Street Journal, Dow Jones and The Post.

Account contributions are limited to $5,000 per year, with the employer portion restricted to $2,500 annually.

The government will invest savings from Trump accounts – which can be used to jumpstart a business or pay for school or a down payment on a home – in low-cost index funds.

They don’t have the same tax advantages as 529 accounts or Roth IRAs, which are primarily used to save for college and retirement, respectively.

Withdrawals will be taxed, and they are not permitted until the beneficiary turns 18. 

But the program makes it easier for major corporations and philanthropists to contribute to the investment accounts on a broad scale.

Rap star Nicki Minaj pledged to contribute $150,000 to $300,000, and Michael and Susan Dell have announced a historic $6.25 billion donation.

Immediately after discussing the public retirement plan, Trump also announced a ban on insider stock trading among members of Congress – one of the few initiatives that Democrats stood and applauded for alongside Republicans during the longest-ever State of the Union speech.