Trump said $465,000 in retirement savings is ‘rich.’ Is it?

President Donald Trump signed an executive order Thursday to expand retirement account access, saying young workers can earn money if they save regularly. Raised $465,000 In such accounts when they reach the age of 65.

“In other words, they’re going to get rich,” Trump said during the signing ceremony.

But financial advisors disputed that characterization, saying $465,000 would not qualify a person as wealthy in retirement; especially considering that this nest egg may have to be spread out over about twenty or thirty years.

“These accounts have their advantages, but I do not believe they will make people rich,” Barry Glassman, a certified financial planner and founder of Glassman Wealth Services, wrote in an email.

“While $465,000 could provide a healthy amount for retirement with 3% inflation, in 30 years that would be equivalent to less than $200,000 today,” wrote Glassman, a member of CNBC’s Council of Financial Advisers. “Again, it’s not a small amount, but it certainly doesn’t qualify someone as rich.”

Average 401(k) investor had roughly $168,000 account balance at the end of 2025, according to asset manager and retirement plan administrator Vanguard Group. The average balance was just over $44,000.

Average IRA balance about $137,000 By the end of 2025, according to Fidelity Investments.

Trump’s executive order aims to give workers who don’t have access to a 401(k) or other workplace retirement plan a way to save for retirement. This is approximately the case 56 million AmericansAccording to 2025 research from the Pew Charitable Trusts, an independent public policy nonprofit.

The President’s order directs the U.S. Treasury Department to establish a website, TrumpIRA.gov, by January 1, 2027. connecting workers to “high-quality, low-cost IRAs” offered by privately held financial companies.

“$465,000 sounds like a big number — and it certainly makes sense for many, if not most, families,” said Winnie Sun, co-founder and managing director of Irvine, Calif.-based Sun Group Wealth Partners.

But converting that lump sum into retirement income would be more like a “modest paycheck” than a windfall that screams “I’m rich,” Sun said.

Take the 4% rule for example. The oft-cited guideline for households determines how much money they can safely withdraw from retirement savings each year throughout their lives.

Households with a lump sum of $465,000 will be able to withdraw $18,600 in the first year of retirement. This amount increases every year to adjust for inflation.

In other words, that nest egg will translate into a retirement income of about $19,000 a year.

Moreover, $465,000 is well below what the average person perceives as “rich.”

On average, Americans think they need to have a net worth of $2.3 million to be considered rich, according to Charles Schwab questionnaire It was published last year. Respondents said it would cost $839,000 to be “financially comfortable.”

But some financial advisors have said that being “rich” in the context of Trump’s retirement plan may be more about establishing a general savings habit than the actual amount of money.

“Sometimes ‘wealth’ isn’t about excess,” said Sun, who is also a member of CNBC’s Council of Financial Advisors.. “I think these programs aren’t really about creating millionaires, they’re more about inspiring people to start saving. So maybe the better question is ‘Is this rich?’ It is not. ‘Is this better than when we started?'”

People who don’t have access to employer-sponsored retirement plans are, as a result, disproportionately low-income individuals who currently have “little or no savings for retirement,” White House spokesman Kush Desai said in an email. Desai said $465,000 in retirement savings “could make a world of difference” for these workers.

Savior Match to come into effect in 2027 The value, up to $1,000 per person per year, is similar to a 401(k) match for low-income households. To be eligible to receive the full amount, individuals modified adjusted gross income It exceeds $20,500 annually. They also need to save at least $2,000 in their IRA for the year. Married couples filing joint tax returns cannot earn more than $41,000 to qualify for the full match.

Single filers with annual income between $20,500 and $35,500 are eligible for reduced matching contributions, while joint filers with up to $71,000 may qualify for reduced matching.

The example also assumes that a 25-year-old saves about $165 per month, or about $2,000 per year, until age 65. They earn an average annual return of 6% on their savings.

About $155,000 of the $465,000 total projection is attributable to Saver’s Match, according to the White House. information note.

Sun said the math in the estimate is sound, assuming an investor saves in a diversified stock portfolio consistent with historical, inflation-adjusted stock returns.

However, this may be unrealistic in other respects, according to financial advisors.

For example, Sun assumes that the household qualifies for the full Savings Match each year; This means their annual income must remain below the threshold throughout their 40-year working career. The threshold is adjusted annually for inflation.

Financial advisors said low-income earners probably don’t have enough income flexibility or free cash flow to save consistently throughout their lives.

Zach Teutsch, founder of Values ​​Added Financial in Washington, DC, points out: Federal analysis published in 2024 By the US Bureau of Labor Statistics to illustrate this point.

The total savings rate for the bottom half of U.S. households was negative in 2022, according to the analysis. According to the BLS document, expenses for the bottom 10% of households were more than twice their income.

“In Trump’s example, the person would have saved more than 10 percent of their income each year for 40 years,” said Teutsch, who is also a member of CNBC’s Council of Financial Advisors., he wrote in an email.

“Among people with incomes below $20,000, the average person is not saving at all and is actually depleting their savings,” he wrote. “And that’s over a year. The idea of ​​someone in the bottom quintile saving is unusual, but extremely unlikely that they would save *every* year for 40 years.”

However, some financial experts say that if a hypothetical low-income saver could build a $465,000 nest egg, they would likely achieve relative success in retirement.

Retirement researchers often measure savings based on the “income replacement ratio.” In other words, how much money can one’s personal savings and other funds, such as Social Security, replace based on one’s pre-retirement income? The goal is to roughly replicate pre-retirement living standards in retirement.

Someone with an annual income of $20,000 and who can earn $20,000 in retirement income from sources like a 401(k) and Social Security would have a 100% income replacement rate. There’s no consensus on the “right” rate for retirement success, but some experts say: Try to change at least 70% of it.