TrumpIRA Plan Expands Access, Revives Retirement Policy Debate

President Donald Trump has signed more than 250 executive orders during his second term as president, so it would have been easy to miss one that aims to fix the biggest problem with the US retirement savings system: the coverage gap.

Only about half of private-sector US workers have access to an employer retirement plan at any given time, mainly because small businesses are less likely to offer the plans.

The executive order acknowledges that problem and directs the US Treasury to create TrumpIRA.gov, a federally run online marketplace for privately offered low-cost IRAs. It’s framed as a way to expand retirement access, especially for gig workers, part-time employees, small-business workers, and the self-employed.

What Is TrumpIRA.gov and How Will It Work?

Savers using the site will be able to receive a federal matching contribution via the newly upgraded Saver’s Match program, which became a refundable $1,000 contribution from the government as part of the Secure 2.0 legislation signed into law in 2022 by President Joseph Biden. The match replaced the Saver’s Credit, which was nonrefundable and therefore did not benefit low-income workers with little or no federal income tax liability.

The planned online IRA marketplace falls short of what some advocates were hoping for—and which Trump teased in his February State of the Union address when he promised to give uncovered workers “access to the same type of retirement plan offered to every federal worker.” That was a reference to the successful Thrift Savings Plan for federal workers, which offers a very low-cost, simple menu of investment options.

The president seemed to be describing a government-sponsored clone of the TSP for uncovered nongovernment workers—in other words, a “TSP-for-All.” That idea echoes elements of a 2021 proposal by economists Teresa Ghilarducci and Kevin Hassett (now the director of Trump’s National Economic Council). Ghilarducci has been advocating for a universal retirement savings plan—paired with robust Social Security benefits—for many years.

There are many moving parts here, so let’s unpack the plans and proposals.

Lessons From Auto-IRA Proposals and Past Federal Efforts

First, don’t confuse either of these retirement saving ideas with Trump accounts—the tax-advantaged savings and investment account for children contained in the “One Big Beautiful Bill.” Those include a $1,000 federal seed contribution for eligible kids.

And for context, it’s important to place the TSP-for-All on the list with a variety of other ideas for improving coverage floated over the years. The debate on this goes back to 2006, when a bipartisan team of policy researchers first proposed the “automatic IRA,” which would have required employers that don’t offer their own plans to enroll workers in a national program and enable payroll deductions. President Barack Obama embraced automatic enrollment concepts, but auto-IRAs didn’t move forward amid broader political resistance to new employer mandates after the passage of the Affordable Care Act. The Obama administration did ultimately launch the myRA, a short-lived government-sponsored IRA program for uncovered workers. The accounts allowed savers to invest in US savings bonds.

In the years since, most blue states have enacted their own versions of the auto-IRAs, and they have been modest successes.

Opposition to the idea by red states—and at the federal level—has centered around mandatory facilitation and payroll deduction by employers, although Mark Iwry, an author of the original auto-IRA proposals, argues that the word mandate is a stretch when compared with the ACA’s requirement that employers over a certain size incur the cost of either sponsoring a health plan or paying a penalty.

“The federal and state auto-IRA legislation simply requires nonplan-sponsor employers to facilitate auto-enrollment in IRAs without cost or liability exposure,” says Iwry, who has worked on numerous bipartisan retirement saving proposals. “How is it fair or reasonable to throw around the politically charged term mandate to describe a minimal, costless, riskless employer task that’s empowering to millions of workers and savers?” he asks.

The Debate Over Mandates Versus Voluntary Enrollment

The TrumpIRA has no mandatory features, at least in part because it stems from an executive order lacking statutory authority to require anyone’s participation. Could it make a significant dent in the coverage gap without mandatory participation? That might depend on how enticing the refundable Saver’s Match turns out to be. Here, the federal government will deposit a 50% match on up to $2,000 of a worker’s contribution to a workplace or individual retirement account—a maximum of $1,000 per person. Eligibility is based on income, and the match is reduced over certain limits. Single filers can earn up to $35,500, and joint filers up to $71,000, and qualify for at least a partial match. Aside from that, success might depend on the Trump administration’s ability to market the accounts.

Doing more would require federal legislation—and that’s the plan, according to Ghilarducci. Most recently, she cowrote the Retirement Savings for Americans Act with economist Kevin Hassett, who served in the first Trump administration and is now the director of the National Economic Council.

The RSAA would create a larger federal matching contribution, calibrated to contributions, and a broader range of workers could qualify to participate. It would set default contribution rates ranging from 3% to 5%. It would also create a TSP-for-All public option retirement savings platform. Employers without their own plans would be required to sign up workers, with an opt-out feature for employees.

Auto-Enrollment and Long-Term Wealth Growth

This auto-enrollment feature is critical to boosting participation rates and wealth creation. Morningstar researchers modeled the impact of various features of a federal plan on retirement wealth over time at age 65; they found that auto-enrollment more than doubles the wealth gains. The other big factor that affects outcomes is long-term participation; that makes features such as portability between jobs and automatic re-enrollment important.

Would the Trump administration back the creation of a huge new government-sponsored “public option” for retirement, considering its consistent pattern of dramatic downsizing of the federal government?

Ghilarducci insists the appetite is there. “The Trump administration knows that much more is needed—not only the larger match but also auto-enrollment. The public option saving platform has a lower priority, which actually makes sense—the question of who manages the money is a second-order problem to getting the wealth accumulation in the first place.”

Will a Public Option Threaten 401(k) Plans?

Even if the administration’s appetite is there, opposition from private sector providers could be intense. They worry that employers might drop their own plans in favor of the Trump public option, notes Iwry.

“Much of the retirement industry sees the TSP-for-All government plan bill as three steps to the left of Bernie Sanders and a threat to crater the 401(k) system this president has consistently defended,” he says. “The industry fears TSP-for-All would cannibalize the private pension system by incenting employers to save costs, terminating their 401(k)s, including employer matching, and sending employees to the new public option with its government match.”

John Lettieri, CEO of the Economic Innovation Group, the think tank that published the 2021 paper by Hasset and Ghilarducci, argues that those concerns are overblown.

“Employers have to offer the same plan to all employees, so any program or incentive aimed at only low-income workers—the large majority of whom lack employer-sponsored benefits—provides no remedy to employers whose retirement plans cover workers that earn above the target thresholds.”

Another fear voiced by some critics, Iwry adds, is that a Trump-proposed government retirement plan for private-sector citizens could be used as a launching pad for conflict-of-interest-driven investments dictated by the White House, a vehicle for political control over enormous pools of capital, or what Treasury Secretary Scott Bessent admitted could be a back door to privatization of Social Security in a conversation about the child savings account plan.

Costs, Benefits, and Long-Term Fiscal Impact

The more robust match would be costly to the federal government—anywhere from $274 billion to $613 billion over 10 years, according to Rand Corp. modeling. But Rand also projected significant savings over time because fewer people would need to rely on safety programs like Medicaid and Supplemental Security Income. Around year 30 of the retirement program, savings start to overtake the total costs of the program—and would far overshadow costs by year 40.

Politicians, of course, rarely show much interest in that sort of time horizon—they’re usually much more interested in the short term. But elevating the idea of expanding saving for retirement marks an important step that could have good outcomes, says Iwry.

“There’s potential for good to come of the administration’s buy-in to expanding coverage, but also considerable risk that things go sideways,” he says.