Nearing Retirement? 5 Takeaways on Social Security, Medicare and 401(k)s From Trump’s State of the Union
Written by
David Nadelle
Edited by
Zuri Anderson
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According to Neilson, when President Donald Trump delivered the longest State of the Union (SOTU) address in history on Feb. 17, 32.6 million Americans tuned in to see what the president had to say about issues and policies that directly affected them and their loved ones. Of those viewers, 72.4% were aged 55 and older.
However, as NBC reported, out of his entire 107-minute speech, Trump spent less than four minutes talking about what is arguably the most important concern to retirees: Health care. Seniors were eager for answers and workers nearing retirement had a stake in the president’s message too, as changes to programs will greatly impact their plans.
Here are five takeaways Social Security, Medicare and 401(k) plans from the SOTU address.
A New Retirement Plan
In his speech, President Trump proposed a plan to allow Americans without access to a retirement plan to sign up for the same kind of plan that is available to federal government employees, with a $1,000 yearly contribution match.
This plan starts in 2027 and should be comparable to the current Thrift Savings Plan, which provides access to a limited number of low-fee funds that invest in the S&P 500 index and short-term Treasuries.
Protecting Social Security and Medicare
Trump reiterated his commitment to “always protect Social Security, Medicare, Medicaid,” however, his administration has already directed policy changes that “drastically shortened the financial life spans of both Medicare and Social Security, accelerating their paths toward insolvency,” said Fortune.
Nearly $1 trillion in Medicaid cuts have already been done through the “One Big, Beautiful Bill Act” and Trump mentioned nothing about the anticipated insolvencies of the Social Security and Medicare Hospital Insurance trust funds in 2032 and 2040, respectively.
Prescription Drugs
In his speech, Trump claimed he had brought prescription drug costs from the highest in the world to the lowest. According to NPR’s fact-check of the speech, this claim is far from the truth, but it was a chance for him to tout his new TrumpRx platform, which launched at the beginning of February and promises high prescription label price cuts for uninsured Americans.
We’ll have to wait and see if the plan can provide substantial discounts for patients who already have access to a wealth of comparable discount plans.
401(k) Accounts Are Flourishing…
But is the typical 401(k) account up $30,000 since Trump took office?
According to Money’s analysis of recent Fidelity data, average 401(k) balances increased 9.6% from the end of 2024 through September 2025. The S&P is up 14.9% since Trump’s inauguration. If 401(k) plans increased by the same percentage (which is doubtful), it would still fall short of Trump’s claims by more than $10,000, wrote Fortune.
Still, a thriving stock market means healthier retirement account balances, and that’s good news for those still contributing as they approach their non-working years.
Cutting Taxes for Seniors
Despite the White House’s claims to the contrary, “The 2025 Act [formerly known as the One Big, Beautiful Bill Act] does not exempt Social Security benefits from taxation,” according to Thomson Reuters.
However, many seniors will be able to take advantage of a new $6,000 deduction starting this tax year in addition to the current standard deduction. This temporary senior deduction is for individuals age 65 or older for tax years 2025 to 2028.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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