Trump’s Retirement Account Push Meets Low-Income Savers’ Reality

President Donald Trump’s effort to expand retirement plan access to workers without an employer-sponsored 401(k) must overcome obstacles to getting buy-in from the people it is meant to assist.

Trump’s executive order requires the Treasury Department to create by Jan. 1 a website for workers who don’t have an employer-sponsored retirement plan to access low-cost individual retirement accounts. The portal’s launch will coincide with the implementation of a Biden-era government match of up to $1,000 for certain low-income individuals who contribute to retirement accounts.

Retirement industry advocates welcomed the administration’s actions as an attempt to address the coverage gap for more than 50 million Americans who don’t have access to employer-sponsored retirement plans. But they said success of the effort hinges on its ability to overcome hurdles that often prevent low-income Americans from saving for retirement.

Low-income workers already can be reluctant to put away money for retirement because of more pressing bills, retirement analysts said, and it may be difficult to get savers to actively sign-up for a new account without an auto-enrollment feature. The administration will also have to engage in a public awareness campaign to inform eligible workers about the new portal and the match.

“If you want to save in an IRA, you generally have to take the initiative to sign up. This new website doesn’t change that,” said Mark Iwry, a former Treasury Department official and architect of the myRA program during the Obama administration.

The myRA program, which launched in 2014 and allowed low-income workers to invest up to $5,500 a year in Treasury bonds, serves as a comparison point for the new initiative. That effort required no minimum to open an account, and employees could contribute using automatic payroll deductions. Total contributions were capped at $15,000 per participant.

Roughly 30,000 people signed up for a myRA account from November 2015 until the Trump administration shuttered the program in 2017, saying it had cost taxpayers nearly $70 million to manage it. Participants had contributed nearly $34 million to the myRA accounts.

“The lack of uptake from myRA is just a reflection of the challenges of reaching that segment of the market,” said Michael Kreps, an attorney with Groom Law Group. “If these savers were easy to reach, the financial service industry would’ve done it already.”

Low-Income Savers

Trump’s initiative will allow participants to enroll in accounts with low fees that offer higher potential returns than the myRA program, where Treasury bonds offered minimal gains.

The Trump push will also have the added incentive of the Saver’s Match, which was signed into law in 2022 as part of the SECURE 2.0 Act and is effective next year. It uses government funds to match 50% of retirement contributions, up to $1,000.

Only individuals earning less than $35,500 and married couples earning less than $71,000 are eligible for the Saver’s Match.

A study from the Economic Innovation Group found low-income workers are more likely to participate in retirement savings programs when a matching benefit is offered. The organization determined the Saver’s Match covers roughly 39 million workers, more than half of whom lack a qualifying retirement account.

“Therefore, under the president’s new policy, 26 million total workers who cannot currently take advantage of the Saver’s Match will be able to do so,” EIG found in its analysis.

KC Boas, retirement initiative lead at the Aspen Institute Financial Security Program, said low-income workers who may benefit from the Saver’s Match are likely to be hit hard by rising prices, making it more difficult to get them to participate in a retirement program.

“It’s very difficult to ask people struggling to make ends meet today to save for something as far off as retirement,” Boas said.

Boas said some of the features that could lead to more participation in the program would require acts of Congress, such as setting up auto-enrollment, establishing default contributions, or expanding who is eligible for the Saver’s Match. Congress could also pass legislation to provide a $1,000 contribution, which might entice workers more than a match that requires them to contribute their own funds.

During Trump’s signing of the April 30 order, National Economic Council Director Kevin Hassett said he had been in talks with Republican lawmakers about ways to expand the Saver’s Match to apply to middle-income and potentially higher earners.

Raising Awareness

The administration will also need to engage in a robust marketing campaign to promote the new website, TrumpIRA.gov, and ensure workers are aware of its features and the details of the Saver’s Match, retirement industry advocates said.

The executive order states the website “shall be designed to increase public awareness” of the opportunity for workers to contribute to retirement savings and receive the federal match.

Retirement industry officials said one reason for optimism about uptake is the early success of Trump Accounts, investment accounts for children that effectively become an IRA when the child turns 18. The government is contributing $1,000 in seed funding for accounts for children born in 2025 through 2028.

Treasury Secretary Scott Bessent said last month that there have been roughly 5 million sign ups for Trump Accounts so far. The accounts will be available for contributions starting on July 4.

The infrastructure the administration built up for Trump Accounts could be useful as officials develop the Trump IRA portal, said Tim Rouse, executive director of the SPARK Institute, an advocacy group for the retirement plan industry.

The SPARK Institute has been hosting workshops with Treasury officials, tax filing professionals, and payroll providers to prepare for the implementation of the Saver’s Match, Rouse said.

“The real question is how much will the government be promoting this to make the public aware of this website,” Rouse said of the Trump IRA initiative. “Because if I’m not aware of it, I’m not going to go there.”