Retirement Retirement Planning

What Trump’s Past Policies Reveal About the Future of 401(k)s

Here's what might happen to your 401(k).

By Catherine Collins

Edited by Andrea Basse

Updated Jan. 9, 2026

Sometimes, tax policies can affect 401(k) plans indirectly, even without specific changes to retirement plan laws. New legislation can affect business growth, market conditions, and employees' take-home pay.

President Trump enacted several tax changes during his first term. While past performance doesn't guarantee future performance, these changes can give us a glimpse of the future of 401(k)s and how consumers typically respond to tax policy changes. Here are some examples of how Trump's first-term changes impacted 401(k)s and what that could mean for employees who want to invest in 401(k) plans today.

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The 2017 tax cuts increased take-home pay

In 2017, President Trump signed the Tax Cuts and Jobs Act. This lowered income tax rates for most people, and when that happens, it usually increases people's take-home pay. So while this did not directly affect 401(k) plans, it did affect the amount of money people had available to save and invest for their future.

This shows how some of the tax policies that Trump makes in his second term can influence consumer behavior when it comes to retirement accounts.

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Lower corporate taxes drove business growth

The Tax Cuts and Jobs Act also reduced the corporate tax rate, which in turn increased many companies' profits. In general, when companies succeed and earn more profits, they can continue to offer workplace benefits such as 401(k)s and 401(k) matches.

Companies are not required to offer workplace benefits like these, but this shows how tax policies can affect the types of benefits employees receive.

Pro-business policies

President Trump's policies are largely pro-business, with the goal of job growth, deregulation, and tax relief. Throughout President Trump's first term, employer participation in 401(k) plans remained stable, and this is expected to continue during his second term as well. Because of the Secure Act 2.0, many businesses are now required to automatically enroll employees in 401(k) plans, which will increase participation even more.

Overall, pro-business policies aim to fuel business growth, which in turn increases profits and helps maintain and grow the workforce. What this shows is that if businesses feel stable or are experiencing growth, they are more likely to continue offering 401(k) plans and employer matches to their employees.

Market growth affects consumer confidence

Though President Trump is pro-business, implementing tariffs rocked consumer confidence in 2025. In April of 2025, the stock market dipped due to consumer uncertainty. Tariffs also negatively affect some businesses, especially those that rely on overseas imports to operate. This contrasts with President Trump's first term, which saw strong market growth and consumer confidence.

It's too soon to tell how tariffs will impact business performance and revenue moving forward. Still, what the stock market fluctuations in 2025 show is that consumer confidence affects people's ability and willingness to invest in their 401(k)s.

Deregulation affected 401(k) management

Deregulation affects 401(k) plans indirectly. The goal of deregulation is to reduce compliance and red tape. For example, President Trump rolled back the Department of Labor's fiduciary rules.

Financial experts differ in their views on this and whether it positively or negatively impacts workers. What it shows, though, is that some changes can affect the companies that actually manage 401(k) plans, which, in turn, can impact the decisions employees make when choosing their retirement plan investments.

401(k) structure remained the same

Even though there have been changes in automatic enrollment, catch-up contributions, and the required minimum distribution age, the actual structure of 401(k) plans themselves has remained largely unchanged from President Trump's first term to now.

For example, many employers still offer 401(k) matches, employees can still get tax benefits from contributing to their 401(k), and annual contribution limits have increased. This shows that even when there are significant economic changes, the ability to invest in a 401(k) has largely remained the same. This alone should help employees to feel more comfortable investing in their retirement accounts, even if there are more market or policy changes ahead.

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Things to know about 401(k)s in 2026

In 2026, employees who have access to 401(k) plans will still be able to contribute to them. The IRS raised the annual contribution limit to $24,500. Those who are age 50 and above can make larger catch-up contributions, although high earners over 50 making more than $150,000 a year must make their catch-up contributions as Roth payments. This important change will affect some people's taxable income, and by extension, their tax rate.

Bottom line

President Trump's tax policies can indirectly affect 401(k) plans and employees' investment choices within those plans. It's wise to stay aware of potential 401(k) changes and stay on the lookout for correspondence from your employer on changes that affect you in particular. If you have any questions about your ability to retire comfortably based on your current contributions and recent tax laws, it's important to consult your Human Resources department, a financial planner, and your accountant to make sure you're on the right track.

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