Trump Executive Order Serves as a Prelude to Secure 2.0’s Saver’s Match Provision - The White House; 401kSpecialist.com
President Trump’s April 30 Executive Order, titled “PROMOTING RETIREMENT-SAVINGS ACCESS FOR AMERICAN WORKERS BY ESTABLISHING TRUMPIRA.GOV,” has been enthusiastically received by the retirement industry, where it is recognized as a significant step forward in promoting the Saver’s Match provision set to become effective in 2027. The creation of a new website to help current workforce members without access to employer-sponsored retirement plans take advantage of the Secure 2.0 government match provisions is widely applauded by several key industry organizations, as highlighted in a post by 401kspecialist.com Editor in Chief Brian Anderson.
The timing of President Trump’s Executive Order is essential to fulfilling requirements set forth in Secure 2.0’s Section 104 (Promotion of Saver’s Match). The TrumpIRA.gov tool, set to be operational by January 1, 2027, will, according to the Executive Order, “… allow workers to filter and compare IRAs based on cost, quality, and investment options, ensuring that hard-working Americans can make informed retirement savings decisions at low cost.”
Read the full Executive Order here…
Read the Executive Order’s supporting fact sheet here…
A Quick Refresher on SECURE 2.0 Saver’s Match Provision
The SECURE 2.0 Act of 2022, part of the Consolidated Appropriations Act, 2023, was signed into law by President Joe Biden on December 29, 2022, and included provisions to replace the failed “Saver’s Credit” passed in 2001. Secure 2.0 contained these provisions:
Section 103, Saver’s Match. Current law provides for a nonrefundable credit for certain individuals who make contributions to individual retirement accounts (“IRAs”), employer retirement plans (such as 401(k) plans), and ABLE accounts. Section 103 repeals and replaces the credit with respect to IRA and retirement plan contributions, changing it from a credit paid in cash as part of a tax refund into a federal matching contribution that must be deposited into a taxpayer’s IRA or retirement plan. The match is 50 percent of IRA or retirement plan contributions up to $2,000 per individual. The match phases out between $41,000 and $71,000 in the case of taxpayers filing a joint return ($20,500 to $35,500 for single taxpayers and married filing separate; $30,750 to $53,250 for head of household filers). Section 103 is effective for taxable years beginning after December 31, 2026.
Section 104, Promotion of Saver’s Match. Section 104 directs the Treasury Department to
increase public awareness of the Saver’s Match to increase use of the match by low and moderate
income taxpayers. The promotion will make clear that the Saver’s Match cannot be withdrawn
without incurring penalties, including repayment to the Treasury Department in some cases where
the Saver’s Match is withdrawn from an individual retirement account before retirement.
Taxpayers will have an election to designate a retirement account to receive the repaid Saver’s
Match. The Treasury Secretary must report to Congress on the Treasury Department’s anticipated
promotion efforts no later than July 1, 2026.
The Saver’s Match is in Sync with AMAC’s “Social Security Guarantee”
The Association of Mature American Seniors (AMAC), in its Social Security Guarantee (SSG) proposal, has long taken the position that all earners need to be guaranteed the opportunity to have more income available at retirement through work and improved retirement savings programs. In its supporting document, AMAC’s proposal notes that 50 million Americans have no retirement plan, and the average person receiving retirement benefits collects roughly $24,000 per year. Accordingly, most retired workers rely on Social Security as a significant portion of their retirement income. For many Americans, Social Security is their only source of income. There is an urgent need to help workers save more for retirement. Coincident with this, the US savings rate is at a historic low, and many Americans in retirement do not have sufficient savings to help them through unforeseen events they must deal with.
Implementation of the Secure 2.0 Saver’s Match next year can be expected to help address this shortcoming in retirement planning, with the TrumpIRA.gov tool intended to aid future retirees in building wealth for their later years.