Trump wants to give up to $1,000 a year to workers without 401(k)s to fix 'gross disparity' — how to save for retirement when you're going it alone

“Half of all of working Americans still do not have access to a retirement plan with matching contributions from an employer,” Trump said during the address (1). “To remedy this gross disparity, I’m announcing that next year my administration will give these often-forgotten American workers … 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 as we ensure that all Americans can profit from a rising stock market.”

Many Americans aren’t where they want to be in their retirement saving journey. Data from the Federal Reserve’s Economic Well-Being of the U.S. Households report shows that only 35% of non-retired adults believe their retirement savings are on track.

Even if the proposal doesn’t move ahead, millions of Americans are already saving for retirement without employer-sponsored plans. Here’s where the average worker falls and what you can do if your job doesn’t offer a contribution match.

Why this proposal matters

According to the Economic Innovation Group (EIG), a bipartisan public policy research firm, 42% of full-time working Americans — excluding government workers and the self-employed — don’t have access to a workplace retirement plan, while 44.1% in total do not participate in one and 50.5% of all workers don’t benefit from an employer match (2). Workplace programs like 401(k)s can make saving easier by automatically deducting contributions from paychecks and offering employer-matched features that help workers build savings over time with less effort. Those without access to workplace plans also tend to earn less. The EIG reports only a quarter of the top half of American workers by income don't have access to one — compared to 65.2% of the bottom half.

Trump’s proposal builds on changes already expected to roll out in the coming years, including a federal “Saver’s Match” that would deposit government contributions directly into eligible retirement accounts. This will replace the nonrefundable “Saver’s Credit” starting in 2027. Under the match program, someone who saves $2,000 annually, for example, could receive up to $1,000 in matching funds. The benefit would primarily apply to lower- and middle-income households.

Although it’s unclear at this stage exactly how the new savings accounts will work, it’s noteworthy that federal government workers are able to save through the “Thrift Savings Plan,” which provides low-cost investment options and matching contributions.

The savings gap the proposal aims to address is substantial. Workers who had savings in their employer-sponsored accounts had a median balance of $40,000 as of late 2022, according to an analysis by the National Institute on Retirement Security (3). But across all workers, including those with no savings, the balance dropped to $955.

Build your savings without an employer plan

Teresa Ghilarducci, an economics professor at The New School who studies retirement security, told CNBC that expanding access to match-based retirement accounts could help low-income Americans start building savings for the future (4).

“Many, many people who are left out of the system will start accumulating for retirement,” Ghilarducci said. They will also be able to reap the benefits of compounding.

For many households juggling housing costs, child care, debt and other financial pressures, saving for the future may seem out of reach, but there are still ways to begin saving for the future even before these new accounts materialize.