Donald Trump has signed more than 250 executive orders during his second term as president, so you could be forgiven if you missed the one that aims to fix the biggest problem with the US retirement savings system: the coverage gap.
Only about half of private-sector US workers have access to an employer retirement plan at any given time, mainly because small businesses are less likely to offer the plans.
The executive order acknowledges that problem and directs the US Treasuryto create TrumpIRA.gov, a federally run online marketplace for privately offered low-cost IRAs. It’s framed as a way to expand retirement access, especially for gig workers, part-time employees, small-business workers, and the self-employed.
Savers using the site will be able to receive a federal matching contribution via the newly upgraded Saver’s Match program, which became a refundable $1,000 contribution from the government as part of the Secure 2.0 legislation signed into law in 2022 by President Joseph Biden. The match replaced the Saver’s Credit, which was nonrefundable and therefore did not benefit low-income workers with little or no federal income tax liability.
The planned online IRA marketplace falls short of what some advocates were hoping for—and which Trump teased in his February State of the Union address when he promised to give uncovered workers “access to the same type of retirement plan offered to every federal worker.” That was a reference to the successful Thrift Savings Plan for federal workers, which offers a very low-cost, simple menu of investment options.
In my latest Morningstar column, I take a deep dive into the proposal and what might come next.