By Abby Schultz

President Donald Trump announced during his State of the Union address on Tuesday that "half of all American workers" without access to an employer-sponsored retirement plan will get access to the same type of plan offered to federal workers, and that the government will match worker contributions up to $1,000 each year.

Nearly 54 million Americans don't have access to retirement benefits at work, including more than eight out of 10 low-income workers, according to the Economic Innovation Group $(EIG)$, a nonprofit public policy organization.

According to EIG, more than a quarter of adults who haven't retired have zero dollars in retirement savings.

"It's a landmark moment," John Lettieri, CEO of EIG said in an interview. "We can't call ourselves a successful retirement system if we have 54 million private sector workers who are not engaged in and don't have access to workplace benefits."

To make the plans work, the White House will use "existing administrative authority to establish automatic retirement accounts for uncovered workers and pair them with a refundable Saver's Match beginning in 2027," according to the Wealth Equity Lab at The New School for Social Research.

The Savers Match plan was established through the Secure 2.0 Act, passed in 2022, and it is set to go into effect next year. The plan is targeted at low- and middle-income workers (with full matches for single filers making less than $20,500 annually). It will provide a 50% match by the federal government on retirement contributions up to $2,000, for a maximum $1,000 match. The match would be received as a direct deposit in a worker's existing IRA or 401(k).

Though the Savers Match program was designed to work with existing retirement plans, Trump's proposal would create new accounts for workers modeled on the Thrift Savings Plan, or TSP, for federal workers.

"Expanding access is a meaningful step," Teresa Ghilarducci, director of the Wealth Equity Lab, said in a statement. "For decades, Congress has tolerated a system in which nearly half of full-time workers and most part-time and gig workers lack access to a workplace retirement plan. Addressing that coverage gap is not trivial."

Trump's plan includes elements of a white paper written in 2021 by Ghilarducci and Kevin Hassett, who is now director of the National Economic Council. It was titled, "What If Low-Income American Workers Had Access to Wealth-Building Vehicles Like the Federal Employees' Thrift Savings Plan?"

The paper's research showed that federal matching "substantially increases participation among low- and moderate-income workers when accounts are simple and accessible," the Wealth Lab said.

The details available from the White House also indicate that the plan is similar in structure to MyIRA, a program launched during President Barack Obama's administration "that didn't take off because there was no match or marketing," Ghilarducci said in an email.

The Saver's Match program, however, gives eligible workers a reason to open an account, she said.

The White House didn't immediately respond to a request from Barron's asking for details of how Trump's plan would work -- or how it will be funded. But its structure is consistent with the Retirement Savings for Americans Act, bipartisan legislation introduced first introduced by Sen. John Hicklooper (D., Colo.) in 2022 and reintroduced in 2025 by Hickenlooper and Sen. Thom Tillis (Rep., N.C.), and Reps. Lloyd Smucker (R., Penn.), and Terri Sewel (D., Ala.).

The bill would provide automatic access to tax-advantaged retirement plans modeled after the TSP. It would give workers access to low-fee investment options, including lifecycle funds and index funds, and it would include up to a 5% matching contribution from a refundable federal tax credit, according to a summary of the bill by EIG.

The legislation also would make these new plans portable, meaning workers could keep the same account if they change jobs or hold several part-time, or "gig," positions. The Hassett-Ghilarducci white paper also calls for the accounts to be portable.

According to EIG's Lettieri, Trump can create the new accounts via executive order, but legislation would be required to auto-enroll workers in the plans and expand the benefits of the Saver's Match beyond its current application to a narrow band of workers. The new accounts are likely to be made portable, too, as "anything done through a federal program is attached to the worker, not to the worker's employer," Lettieri says.

A big plus is that the bipartisan Retirement Savings Act has already been introduced in both houses of Congress, and it "pairs perfectly with what the President is trying to do," he says.

The White House's plan "may represent a policy opening" that "could evolve into a legislated, progressive, and secure universal system," said Wealth Equity Lab's Ghilarducci in the statement. "But executive action cannot substitute for structural reform," she added, detailing how core weaknesses in the U.S.'s retirement system remain intact.

"Social Security needs more revenue. Tax subsidies for retirement are regressive. Savings is voluntary. Defined benefit pensions have eroded. Wages have stagnated. Workers are asked to shoulder market, financial, and longevity risks that they are least equipped to manage," she said.

Write to Abby Schultz at abby.schultz@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 25, 2026 15:02 ET (20:02 GMT)

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