As many as 40% of retirees survive entirely on Social Security. In 2026 numbers, that is roughly $2,000 a month to support housing, gas, food, utilities and medical expenses.
The problem starts decades before retirement: 56 million Americans currently lack access to any employer-sponsored retirement plan. Without auto-enrollment or matching contributions, these workers are left to navigate a complex system alone.
President Trump's recent executive order establishing a new IRA marketplace and match program aims to provide a lifeline. To help it succeed, its private sector partners will need to deliver.
Will the program be enough?
By January 2027, the Treasury will launch an online marketplace where uncovered workers, such as gig workers, part-timers, small business employees and the self-employed, can browse and enroll in vetted private-sector IRA accounts.
The portal (TrumpIRA.gov) will aim to drive adoption of a SECURE 2.0 provision, which offers eligible low-income workers a government match of up to $1,000 a year on retirement contributions.
The administration is right that ownership stakes improve economic outcomes. Decades of research back this up. So while an annual government contribution of $1,000 could leave participants with nearly $90,000 extra by retirement (assuming a 6.15% return over 30 years), the program's implied bet is that the match will inspire further individual action.
But even if the program succeeds in engaging more Americans around their retirement, it has not yet outlined a plan to account for the many obstacles that first-time savers may face. That is where its industry partners can help.
The small-balance trap
One likely reality is that the program could accelerate the growth of small-balance accounts, which are frequently treated as emergency funds rather than nest eggs.
According to Alight Solutions, 80% of people with retirement balances under $1,000 cash out when they leave a job. Nearly two-thirds of those with balances between $1,000 and $5,000 do the same. In contrast, only 2% of people with balances of $250,000 or more cash out.
The problem is almost entirely concentrated in small accounts. According to the Employee Benefit Research Institute, addressing cashout leakage for accounts under $5,000 would preserve $1.5 trillion in retirement savings over 40 years.
It is fair to assume that TrumpIRA.gov will create millions of accounts that will, at any given time, sit far below the $5,000 to $7,000 threshold of a small-balance account. The program's success will hinge on how carefully its partners account for this reality.
The private sector's obligation
Education will be as vital as technology. Consider that one study found more than 40% of Americans don't know what a 401(k) is, and even fewer can define an IRA. In 2021, the Government Accountability Office found that a similar number (41%) of 401(k) plan participants do not know they pay fees for their retirement accounts.
For new retirement savers, the confusion may not end there. For many, it will not be obvious that cashing out a few thousand dollars today can cost tens of thousands in the future, or that early withdrawals can trigger substantial fees and tax penalties.
To combat this, private sector partners comprising TrumpIRA.gov's offering will have an obligation to provide:
- Simple, mobile-first onboarding
- Plain-language explanations to bridge the trust gap
- Behavioral nudges, like automatic contribution increases, that are the difference between an account that grows and one that gets abandoned
The reality is that the executive order targets groups most vulnerable to making costly retirement mistakes. The administration and its private sector partners must recognize that retirement access is not the same as security.
The power of SEPs: The right tools to get the job done
To truly secure the self-employed demographic, the administration should also consider expanding the vehicle options available through the marketplace.
Simplified Employee Pensions (SEPs) offer significantly higher contribution limits than standard IRAs (as high as 10 times as much as a traditional or Roth IRA), making them a powerful wealth-building tool for self-employed and small business workers who may have limited working years or irregular career trajectories.
More broadly, any account offered through the marketplace should allow flexible contributions that can rise and fall with income — a critical feature for the self-employed workers this program is designed to serve.
The direction of this program is right. But its legacy will be determined by its ability to protect new retirement participants from raiding their futures when life happens today.
To make a true difference in retirement outcome, the administration and its private-sector partners will need to put the small details first. Education should be on top of that list.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
