President Donald Trump announced a new economic proposal for American citizens during his State of the Union address to Congress on Tuesday, unveiling a plan to greatly expand access to retirement savings.
The initiative aims to support the millions of workers who currently lack employer-sponsored pension plans. Under the proposal, the White House plans to offer up to $1,000 a year in matching funds, Fortune reported.
“My administration will give these forgotten American workers, the great people, the people who built our country, access to the same type of retirement plan that is offered to every federal worker,” Trump said in a speech Tuesday. “We’ll match your contribution up to $1,000 each year.”
Trump delivered his second SOTU address on Tuesday shortly after expressing frustration over a Supreme Court ruling that invalidated a cornerstone of his economic agenda: the tariff regime.
What is a 401(k)??
Along with his pledge to match each citizen’s retirement contribution by up to $1,000 a year, Trump said his administration would make sure “all Americans can benefit from a rising stock market,” Fox News reported.
However, the US leader did not further specify where in the federal budget the proposed matching money might come from, the report said.
A 401(k) is a defined contribution plan in which the worker commits to depositing a percentage of each paycheck directly into an investment account. Employers often match some or all of this allowance.
Employees have the option to select specific investments held in their 401(k) accounts from a selection offered by their employer. These options typically include a variety of investment options, including stocks, bonds, mutual funds, and target-date funds, designed to reduce the risk of losses as the employee nears retirement.
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More than 40 million American workers, including about 42% of full-time employees, do not have access to employer-sponsored retirement plans. For part-time workers, that number rises further to 79% of them without access to a retirement plan, according to data available on the Economic Innovation Group.
In line with the data, Trump pointed to what he described as a painful gap among retirees. He claimed that roughly half of all working Americans have no access to any formal retirement plan, nor do they have access to employer matching contribution programs, Fortune reported.
Are American workers not saving enough?
Meanwhile, BlackRock’s billionaire CEO Larry Fink warned investors earlier in 2025 that most don’t have nearly enough saved to see them through to retirement. The average amount a person should save for retirement is about $2.1 million, Fink said earlier, citing the survey. “Almost nobody is close,” Fortune said.
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401(k) plans have largely replaced traditional retirement plans as the primary pillar for covering living expenses during retirement.
Trump has always focused heavily on the issue, often referencing 401(k) plan savings in tandem with his references to the stock market when he’s outperforming. In his remarks, he linked the expansion of stock-market-linked retirement savings to the need for greater scrutiny of Congress’s use of the stock market.
