Our president loves slapping his name on things. The latest example involves retirement. This past week, President Trump announced the creation of TrumpIRA.gov, a platform that will connect savers with retirement accounts from private-sector companies–similar to what TrumpRx does for drugs. Only funds with low administrative costs and zero minimum contribution and balance requirements will be included.
The effort aims to redress inequities in our retirement system, where 42% of full-time private-sector workers and even more part-time workers lack access to a 401(k). These workers are eligible to open an individual retirement account. But many don’t, whether due to lack of knowledge, time to navigate the process, or money to contribute.
TrumpIRA aims to help low-income workers in particular by increasing awareness of the Saver’s Match, which will replace the Saver’s Credit starting next year. Eligible savers can get a matching grant of up to $1,000 a year sent directly from the government to their retirement account. This will help level the playing field with people who get matching contributions from their company into their 401(k). Yet the income cap for a partial or full Saver’s Match is low, phasing out at $35,000 for single filers and $71,000 for joint filers.
For the president’s effort to have teeth, it would need Congress. Legislation would be required to increase the income eligibility for the Saver’s Match, for example, or to make participation in TrumpIRAs automatic. Since the Pension Protection Act of 2006, automatic enrollment has moved the needle in getting more workers to save in 401(k) plans.
As it stands, TrumpIRA seems a lot like TrumpRx: a well-intentioned effort aimed at a real problem that doesn’t break new ground or live up to the hype.
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