Key Points
-
During his State of the Union address, President Trump announced an intent to create a new type of retirement plan.
-
There are still a bunch of details to work out.
-
The plan would offer up to a $1,000 government match to qualifying savers.
- The $23,760 Social Security bonus most retirees completely overlook ›
Saving enough for retirement is already a big challenge, but if you don’t have access to a 401(k) or a similar account through your job, it can feel almost impossible. You’re stuck with other accounts, like IRAs, that have lower contribution limits, and you won’t qualify for an employer match to help you reach your savings goals more quickly.
However, this might not be the case forever. President Donald Trump recently announced an intent to create a new type of retirement account that would allow those without access to a workplace retirement plan to earn up to a $1,000 match each year. Here’s what we know so far.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
There are still a lot of details to be ironed out
President Trump announced during his State of the Union address in February 2026 that his administration would create a new type of retirement plan next year for workers who lack access to a 401(k) or other workplace retirement plan. This would be similar to the retirement plan currently available to federal workers and would allow participants to earn up to a $1,000 government match each year.
The address didn’t provide details about how this would look in practice, so it’s difficult to say much about how the accounts will work yet. It’s unclear what the contribution limits would be, what investment options you’d have, and how easy it would be to withdraw money from these accounts after you’ve deposited it there.
These are details we’ll have to watch as we get closer to 2027. It’ll likely take new legislation to create these accounts, and some elements may change along the way.
How the $1,000 match could work
Typically, a 401(k) match involves your employer contributing either $0.50 or $1 for every dollar you contribute, up to a certain percentage of your income. This new retirement plan will likely employ a similar strategy, and a new law already set to take effect in 2027 gives us an idea of what that could look like.
The SECURE 2.0 Act, passed at the end of 2022, includes a provision known as the Saver’s Match, set to take effect next year. It ends the tax credit for IRA and retirement plan contributions and replaces it with a matching contribution. The match is 50% of your own contributions up to $2,000, or a maximum of $1,000.
However, there are income phaseouts for high earners. Married couples filing jointly who earn more than $71,000 and single filers who earn more than $35,500 won’t qualify for this match. But it could give low-income Americans a huge boost if they can take advantage of it.
This is something to keep an eye on as we get closer to 2027. Once the government announces some sort of official plan for these new retirement accounts, you can start deciding whether you want to contribute anything here in future years.
The $23,760 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Join Stock Advisor to learn more about these strategies.
View the “Social Security secrets” »
The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
