Originally published on 2/25/26

On Tuesday, February 24, President Donald Trump held the longest State of the Union address in history. During his two-hour remarks, he took time to honor the USA Men’s Hockey team as well as two WWII veterans. He also spoke about his tariffs, his work with “angel families,” inflation and even retirement, which he promised would be changing for the 56 million Americans who don’t have an employer-sponsored savings plan. Below we share what you need to know about the potential changes coming to your retirement fund, and provide details on when it could take effect. 

What to know about President Trump’s new retirement account program 

During his State of the Union address, President Trump announced that he would be expanding financial planning and saving for American workers who either don’t have a retirement plan or work for an employer who doesn’t have a contribution-match program. 

President Trump’s retirement plan was announced after he vowed to protect Social Security, Medicare and Medicaid, even though his One Big Beautiful Bill Act cut Medicaid by $1 trillion. The plan, according to Axios, is an expansion of the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, which was passed by President Joe Biden in 2022. That program was based on President Trump’s 2019 SECURE 1.0 act and has had bipartisan support over the years. 

“We will always protect Social Security, Medicare [and] Medicaid. Since I took office, the typical 401(k) balance is up by at least $30,000. That’s a lot of money. We have millions and millions of people, because the stock market has done so well, setting all those records. Your 401(k)s are way up. Yet half of all working Americans still do not have access to a retirement plan with matching contributions from an employer,” Trump said during his address. “To remedy this gross disparity, my administration will give these forgotten American workers, great people, 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.” 

Currently, all federal employees hired after 1983 are on the Federal Employees Retirement System (FERS) retirement plan. This plan has three components: Basic Benefit Plan, Social Security and the Thrift Savings Plan (TSP) and you can view what exactly that means below. 

• Basic Benefit Plans are mandatory for all federal employees. They work by taking a set percentage of an employee’s paycheck and putting it into a retirement fund.
  • If they were hired before 2013, 0.8 percent of their annual salary is automatically put into a retirement fund. 
  • If they were hired in 2013, 3.1 percent of their annual salary is automatically put into a retirement fund.
  • If they were hired in or after 2014, 4.4 percent of their annual salary is automatically put into a retirement fund.
• Social Security is a mandatory government-funded retirement plan that all employees pay into each month. Currently, every employee, federal or not, puts 6.2 percent of their gross wage into Social Security each year. 
• Thrift Savings Plan (TSP) is the government’s version of a 401(k). This program is optional and currently, the federal government will match up 5 percent of a federal employee’s total contribution. This reportedly is going to be the program that nonfederal workers who don’t have an employer-sponsored savings plan will be enrolled in under President Trump’s plan. 

“This is a big deal,” Teresa Ghilarducci, a progressive labor economist at the New School, told Axios. “It finally recognizes that most people don’t have anything saved for retirement, and they don’t save consistently.”

When will President Trump’s new retirement account program go into effect? 

In his State of the Union speech, President Trump didn’t give a timeline for when this new program will take effect. However, since it’s supposed to be an expansion of the SECURE 2.0, it could begin as early as 2027. This means that people who contribute $2,000 to their retirement accounts will get $1,000 in matching funds as early as next year. 

“I think this is going to be a very big part of working Americans’ retirement program, because there is a tremendous amount of financial insecurity,” Treasury Secretary Scott Bessent told NBC News on Wednesday. “[It could help] those who have been left behind, the ones who don’t have the 401(k)s.” 

As of publication, there is no news on how people can enroll in this new retirement plan.

Link to original: https://www.womansworld.com/life/money/trump-401k-plan-explained