President Donald Trump signed an executive order on Thursday regarding the retirement savings proposal he introduced at his State of the Union address earlier this year. The proposal is meant to close the retirement coverage gap, which has left more than 50 million workers in the private sector, the majority being low to moderate-income earners.

Trump’s Newest Business Plan

Starting next year, workers will have access to a website called TrumpIRA.gov. From that website, they can open a “new, low-cost IRA account. You’ll then be able to access the same type of retirement accounts that federal employees enjoy through the Thrift Savings Plans,” Trump said.

“For millions of Americans who lack employer-sponsored plans, this will be really revolutionary, because they’ll be covered.” The employees that Trump is referring to, whose new IRA accounts would impact, work with small businesses, part-time workers, independent contractors, and self-employed workers.

According to AARP, approximately 78% of businesses with fewer than 10 employees do not offer an employer-sponsored retirement plan because it is not required. They also show that nonwhite workers are less likely to have access.

The executive order signed into law yesterday specifies that the IRA providers listed on Trump’s website must “maintain low administrative costs,” meaning the overall annual expense ratio, including operating costs, management fees, and administrative expenses, cannot exceed 0.15% of one’s account balance.

The providers are also prohibited from imposing a minimum contribution level or maintaining balance requirements.

Promoting The Federal Saver’s Match

Trump also allowed some earners who open an account and who qualify for the federal Saver’s Match, to receive up to $1,000 for singles and up to $2,000 for couples. Congress passed this program during the Biden administration, and it takes effect in 2027. 

Those who qualify for the match are low to moderate-income workers making less than $35,500 a year, or $71,000 if you are a married couple. The caveat is that single workers must save up to $2,000 that year, or $4,000 for couples, in a qualified retirement plan such as a 401(k), IRA, or auto IRA,  to receive the federal match.

Americans Are Living Paycheck to Paycheck

The executive order directs the federal government to raise public awareness of the new Saver’s Match program and hopes it pushes eligible workers to save more. 

Kim Olson, the senior officer on the retirement savings project at the Pew Charitable Trusts, reported that 87% of people without access to a work-offered retirement plan would be more likely to save if they could receive a match. 

The concern behind this plan, and where Olson received her high percentage from, is that generally workers making $35,500 or less a year do not have the means to throw $2,000 to $4,000 in a retirement plan they cannot touch until they are of age. 

It is different to be able to save in a personal account, since you can access it in cases of emergency, but the majority of Americans, even those exceeding the low to moderate income limit, are living paycheck to paycheck. 

The executive order, the government officials promoting it, and the Saver’s Match Act are completely out of touch with reality, and initiating these programs is tone-deaf. 

The Executive Order

At the signing event of the executive order in the Oval Office, Trump and the director of the National Economic Council, Kevin Hassett, said the administration will work with Congress to expand the Saver’s Match eligibility to those making more than the current income limits.

Congress is also being recommended to “codify the policy set forth in this order so that workers lacking access to employer-provided retirement plans … have access to a retirement option with low fees, eligibility for the Federal Saver’s Match or other matching contributions, diversified index‑based investment options, automatic portfolio choices, and portability,” as stated in the executive order.

It is not clear how many of the more than 50 million people eligible for Trump’s IRA will do so. A Morningstar analysis done on the projected enrollment of eligible workers found that “approximately 32.3 million workers would enter the retirement savings system under a federal auto-enrollment plan, even after accounting for opt-outs.”

However, Morningstar’s analysis is based on automatic enrollment, but Trump’s plan is voluntary, and will likely need Congressional authority for workers to be automatically enrolled. So, the number of workers who open up a retirement savings account could be significantly lower than their estimate.