Trump’s New Retirement Plan Targets ‘Forgotten’ Americans with $1,000 Match

By Michael Katz | Wednesday, February 25, 2026

Treasury Secretary Scott Bessent stated that Congress can use budget reconciliation to advance a retirement savings proposal President Donald Trump announced in his State of the Union address.

Trump revealed on Tuesday night that beginning next year, the federal government will match employees’ 401(k) contributions up to $1,000 annually. The initiative would apply to “forgotten American workers” who lack access to retirement plans with employer contributions.

Bessent explained during a recent interview that the proposal could be implemented through budget reconciliation, emphasizing it as support for working Americans left behind. He noted the program would include federal employees and members of Congress.

The Treasury official added that the initiative would be rolled out “in the coming weeks and months,” framing it as critical assistance for working Americans facing financial insecurity.

Congressional Republicans previously used the budget reconciliation process to pass the One Big Beautiful Bill Act, enabling it to clear both chambers with simple majorities.

White House figures indicate more than 44% of full-time U.S. workers—approximately 40.6 million people—do not participate in any retirement plan, and nearly 51%, or 48.8 million individuals, receive no employer match.

Bessent noted that while the president previewed the initiative in his speech, it would become “a very big part of working Americans’ retirement program” due to widespread financial insecurity.

The retirement savings proposal is among several initiatives floated by the Trump administration recently. Another notable policy is the “Trump accounts” for children, which function as specialized individual retirement savings plans for U.S. citizens under age 18. These accounts include an automatic $1,000 contribution from the Treasury Department for those born between January 1, 2025, and December 31, 2028.

Major corporations have pledged to match these contributions for children of their employees, and billions in private donations have been reported by the administration.

Bessent concluded that currently, 38% of Americans have no exposure to the equity market, but over time this initiative would ensure “everybody will have a stake in our great, innovative economy and the American dream.”