Everyone knows about President Trump’s Investment Accounts for kids, but at the State of the Union, he announced plans to launch similar investment accounts for adults. After touting the stock market at all-time highs, Trump said he wanted everyone to benefit — including those who are not offered retirement accounts through their employers.
“Half of all 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. We will match your contribution with up to $1,000 each year as we ensure that all Americans can profit from a rising stock market.”
About 40.6 million full-time working Americans lack access to a retirement plan, and nearly 51% do not benefit from an employer match. The White House hopes the new initiative will help begin to close that gap.
A White House official told The Daily Wire that the accounts would be similar to current federal employee savings plans known as Thrift Savings Plans (TSP). The federal retirement plans function similarly to a 401(k). Contributions can be made pre-tax or after-tax, with the IRS setting annual contribution limits. TSP allows holders to choose between five investment options that range from government securities, bonds, the S&P 500, small/mid-cap U.S. stocks, and international stocks. There are also several lifecycle funds that allow account holders to invest across the board.
Unlike Thrift Savings Plans, however, funding for the new program will stem from an existing Savers Match enacted under the bipartisan SECURE 2.0 legislation, allowing the government to match up to $1,000 for eligible Americans. The program will include a new structure allowing workers to utilize the accounts even when changing jobs. Critics argue existing legislation will not allow the plan to come to fruition, while the White House says it is possible but acknowledges future legislation would be needed to “bolster this game-changing plan.”
Under the proposal, private investors and philanthropists will be able to contribute to these accounts under the President’s plan, a model the White House also used for investment accounts for children and the White House ballroom project. The White House Ballroom plans to be fully funded by private donations, with contributions exceeding $300 million. Trump Accounts for kids have also had a healthy dose of private investment, with Michael and Susan Dell kicking off donations with $6.25 billion.
Once the Trump accounts are funded, the Trump administration expects 56 million previously uncovered workers to be matched with a high-quality, low-fee retirement plan.
The White House told The Daily Wire they plan to unveil additional details in the near future.
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