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Contributor: However you feel about their creator, TrumpIRAs are sorely needed

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As a progressive economist, I wrote a paper in 2021 with a generally conservative colleague, Kevin Hassett, who now directs the National Economic Council in the Trump White House. We agreed then on the basic arithmetic of the American retirement crisis. We still do. That’s why people like him and people like me can all say: Trump’s executive order establishing TrumpIRAs, signed last month, is simply the right move for American workers.

The American retirement system is not broken for everyone. It is broken for the bottom half. A senior executive earning $500,000 contributes the maximum $23,000 to a 401(k) and receives a 6% employer match of $30,000. Because those contributions are deducted at the 37% rate, the IRS subsidizes another $8,510. In a single year, the tax code and the employer together deliver nearly $40,000 in retirement-building support for that executive. Meanwhile the restaurant worker earning $32,000 with no workplace plan gets zero.

56 Million Americans Don't Have a Workplace Retirement Plan. Trump's New Executive Order Targets That Gap

President Donald Trump wants you to save for retirement, so he's highlighting the incentives intended to get you into the saving habit.

Saving money isn't easy, particularly if your budget is tight. Not only does it require living below your means, but it also requires delayed gratification and thinking long-term. Most humans aren't great at any of those things. U.S. President Donald Trump wants to highlight a subtle policy shift meant to incentivize people to get into the savings habit. It could be a big deal.

According to a recent Presidential executive order, "Tens of millions of Americans lack access to employer-sponsored retirement plans." The number is pegged at roughly 56 million, according to the Pew Charitable Trust. The list includes independent contractors and those who are self-employed, among others.

Opinion | This Trump Proposal Could Result in Millions of Americans Losing Their Retirement Savings

Mr. Rattner, a contributing Opinion writer, served as counselor to the Treasury secretary in the Obama administration.

Pressed by his Wall Street supporters, President Trump is moving to liberalize the types of investments Americans can make with their individual retirement accounts. Instead of betting their retirement savings on plain vanilla stocks and bonds, account holders would be allowed to move their funds into sexy sectors like private equity, private credit and cryptocurrency — no matter their complexity, risk and illiquidity.

Supporters of the switch make the case that individuals should have the same access to private assets with potentially higher returns as institutions and the wealthy. But this argument rests on the false premise that most Americans are equipped to evaluate these complex, opaque investments. They are not. And expanding access to them risks doing more harm than good.

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