The federal government is making a change to how it matches retirement account contributions, and those eligible could earn up to $2,000 per year from the new plan. As part of the SECURE Act 2.0, starting in 2027, the government will introduce the Saver’s Match program. This new program is similar to the current Saver’s Credit program, but there are a few differences.
The Retirement Savings Contribution Credit, or Saver’s Credit, is a federal tax credit given to eligible U.S. taxpayers who contribute towards a retirement account. The program is geared toward mid-and-low income citizens. It can pay up to $1,000 for single filers and $2,000 for married couples filing jointly.
To be eligible for the current Saver’s Credit, applicants must be 18 years or older, not a full-time student, not claimed as anyone’s dependent, and must make below the annual adjusted gross income threshold. There are other requirements that those interested should check for to see if they qualify.
The new Saver’s Match is not a tax credit. It is a direct payment made to an eligible taxpayer’s retirement account, worth 50 percent of the person’s annual contribution and up to $2,000 per individual. Roth IRA accounts are one of the few retirement accounts that are not eligible for these contributions.
Using the Saver’s Match program can help boost retirement accounts because of the 50 percent match. Those who are eligible when the plan goes into effect should take advantage of the opportunity.