President Donald Trump, in his State of the Union address Tuesday night, suggested a major new retirement benefit for tens of millions of American workers, embracing an economic policy that proponents say could bolster the federal retirement safety net.

Speaking to congressional lawmakers, Trump pledged to extend to private-sector workers the same type of retirement plan already available to federal employees. He also said the government would kick in up to $1,000 per year to their accounts, presumably in matching benefits. Roughly 54 million workers in the private sector have no workplace retirement benefits and do not benefit from stock market gains, according to research cited by the Economic Innovation Group, a Washington-based think tank, as part of what some experts have termed a “retirement crisis” in America.

“Half of all of working Americans still do not have access to a retirement plan with matching contributions from an employer,” Trump said. “To remedy this gross disparity, I’m announcing that next year, my administration will give these often forgotten American workers – great people, the people that built our country – access to the same type of retirement plan offered to every federal worker. We will match your contribution with up to $1,000 each year.”

The announcement was celebrated by Trump supporters as a major new economic policy heading into the 2026 midterm elections, but critics pointed out some problems with Trump’s pledges, and are skeptical it will substantially boost savings for working-class Americans.

The most obvious challenge is that it’s not clear how much Trump can do on his own. Under existing authorities, the administration can create portable retirement accounts – modeled on the Thrift Savings Plan used by federal employees – and make them available to workers who currently lack a workplace plan. But the government cannot compel employers or workers to automatically enroll, nor can it unilaterally appropriate funds to provide a universal $1,000 match to all eligible workers.

Instead, the administration can facilitate take-up of a benefit that already exists. The bipartisan Secure 2.0 bill, signed by President Joe Biden in 2022, created a “Saver’s Match” – a federal contribution of up to $1,000 annually for qualifying workers who put $2,000 in an eligible retirement account. One problem has been that many eligible workers have had nowhere to put their contributions. Trump’s executive action could create additional account infrastructure, but eligibility would still be constrained. Only workers who make less than $25,000 per year, or roughly $41,000 for couples, are eligible.

More impactful would be if Trump’s comments spur congressional action. A White House official suggested that the administration will support bipartisan legislation to automatically enroll eligible workers in federal accounts, provide the $1,000 federal match for low- and moderate-income workers, and make those accounts portable across jobs. One bill is backed by a coalition that spans Charles Schwab, AARP, DoorDash and Uber.

White House economist Kevin Hassett has backed a similar kind of approach. Of the more than $200 billion in annual income tax expenditures related to retirement savings, less than 1 percent flows to workers in the bottom income quintile, according to the Economic Innovation Group. This would move some of those benefits down the income distribution.

“Since we’ve had the 401(k) system this has always been the problem: A huge share of the workforce has not been participating and doesn’t have access to these benefits. Closing that gap is a big first step,” said John Lettieri, co-founder of the Economic Innovation Group. “It’s a long-run exercise to get people into the market, engaged in long-term savings and investment behavior with matching benefits. That’s a proven way of building wealth over time, including for low-income savers.”

That said, there are reasons to doubt that even the legislation being debated in Congress would do much to increase retirement security for low-income workers. Low-income Americans often do not have enough to live on already, much less an extra $2,000 per year to put into retirement accounts, said Matt Bruenig, founder of the People’s Policy Project, a left-leaning think tank.

The Survey of Consumer Finances suggests that fewer than 12 percent of people who earn below $43,000 save for retirement.

“Almost no low-income people have retirement accounts. This is not because they are disallowed from having them,” Bruenig said. “It’s because they can barely pay their bills. Nothing in the president’s plan changes that.”

(c) 2026, The Washington Post