President Trump Says These New Retirement Accounts Could Make Low-Income Savers "Rich." Is He Right?

You work hard and save what you can, but when it comes to retirement planning, you aren't alone if you feel like you're barely making progress toward your goals. Living costs keep increasing, and you may not have access to a 401(k) through your job.

The federal government is launching a new initiative next year to try to help savers struggling with the latter issue, and President Trump recently made a pretty bold claim that it could make low-income savers "rich." But the reality is a bit more complicated.

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How the new Saver's Match will work

Beginning next year, workers without access to a 401(k) through their employer will be able to open an IRA through private-sector institutions via a new website, TrumpIRA.gov. These IRAs will operate identically to traditional and Roth IRAs that you might open directly with a bank or broker.

Low-income savers who contribute to one of these qualifying IRAs will be eligible for a federal Saver's Match worth up to $1,000. This match was originally created as part of the SECURE 2.0 Act, passed at the end of 2022, and is set to take effect in 2027. It will replace the current Saver's Credit, which reduces the tax bills of low-income families who save for retirement.

To qualify for the full match, single adults must have an income of $20,500 or less, while married couples must have an income of $41,000 or less. They must also save $2,000 of their own money in the IRA, as the match is 50% of their personal contributions, up to $2,000. Single adults with incomes up to $35,500 and married couples with incomes up to $71,000 may be eligible for a reduced match. Those with higher incomes will not be eligible for the match.

How "rich" will the new Saver's Match make you?

While signing the executive order to create the TrumpIRA.gov website, President Trump shared an example of what the Saver's Match could do for workers: A 25-year-old worker who qualifies for the match and saves $165 per month in their IRA could wind up with $465,000 by the time they're 65. "In other words, they'll be rich," Trump said.

While $465,000 is undeniably a large sum, whether it counts as "rich" depends heavily on your lifestyle and longevity. Coupled with Social Security and other retirement income sources, it might be enough for some savers. Others may struggle to cover even their basic expenses with only $465,000 in savings, especially if they live in an expensive city.

You could end up with more than this if your investments perform better than the 6% average annual return used in President Trump's example. But there's no way to guarantee this, so if you can save more in your IRA, it's worth doing.

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