On Tuesday, President Donald Trump announced a new retirement plan from next year for Americans without 401(k)s or other employer-sponsored retirement accounts, which will give them “access to the same type of retirement plan offered to every federal worker.”
In the 2026 State of the Union address, Trump called the gap in retirement accounts a “gross disparity” and said, “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.”
The new proposal is likely an extension of the Biden-era SECURE Act, which aimed to provide up to $1,000 in matching funds for workers with existing retirement accounts. The administration now plans to create new accounts also for those without one, starting next year.
Retirement Overhaul Gains Urgency
Notably, in December, Trump revealed that his administration was seriously considering implementing a retirement savings plan similar to Australia’s superannuation system.
The system is built on mandatory employer contributions to private superannuation accounts, which grow through investments and remain inaccessible until retirement, supplementing the public age pension. Workers can make additional contributions, and balances increase over time through investment returns.
It remains uncertain whether the Trump Administration intends to introduce the system alongside the longstanding U.S. 401(k) framework.
Meanwhile, in September, the IRS finalized new regulations for retirement “catch-up” contributions under the SECURE 2.0 Act, requiring higher-income workers (earning over $145,000) to make retirement “catch-up” contributions to Roth accounts, which pay taxes upfront but allow tax-free growth and withdrawals.
These shifts in the American retirement system come as a June report warned that the main trust funds for Social Security and Medicare could be exhausted by 2033, one year sooner than previously projected.
401(k) Balances, Dow Jones Hit Record Highs
A report from Fidelity Investments in November aligns with Trump’s statement that 401(k)s are doing well. Retirement account balances rebounded sharply after early 2025 market volatility, reaching record highs in the third quarter. The average 401(k) balance rose 9% year over year to an all-time high of $144,400, while the average IRA balance climbed 7% to $137,902.
Meanwhile, the S&P 500 climbed 15.70% over the year, while the Dow Jones Industrial Average closed above 50,000 for the first time earlier this month. Trump attributed the same to his tariff and economic policies and predicted a 100,000 mark by the end of his term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors
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