President Trump announced during his State of the Union address Tuesday night plans to offer Americans access to a retirement account similar to those available to federal workers.

Why it matters: There are roughly 50 million Americans without employer-sponsored retirement plans, like 401(k)s, and there’s been growing bipartisan interest in expanding access.

What he’s saying: Trump said he would offer Americans who don’t have 401(k)s or other employer-based retirement accounts “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,” he said.

How it works: The White House says it’s expanding on an existing law passed under former President Biden called the Secure Act 2.0 (which is an update of a law passed during Trump 1.0).

• A piece of it takes effect next year and would offer workers who already have retirement accounts up to $1,000 in matching funds if they contribute $2,000 on their own.

Zoom in: A White House official tells Axios that it would be similar to one offered to federal employees called the Thrift Savings Plan, which offers access to a handful of low-fee funds that invest in things like short-term Treasuries and the S&P 500 index.

State of play: The White House now wants to set up retirement accounts for people who don’t already have one.

• Instead of these folks opening up an IRA on their own — a hurdle most don’t take — they would just check a box on their tax form to get things started, says Teresa Ghilarducci, a progressive labor economist at the New School who is familiar with the plan.

“This is a big deal,” Ghilarducci says. “It finally recognizes that most people don’t have anything saved for retirement, and they don’t save consistently.”

• She worked on an early version of this plan with White House economic adviser Kevin Hassett in 2021.

• “The idea was to get someone far on the right and far on the left to come together,” she says.

Source: axios