A Timely Benefit for Low and Moderate Earners: The Savor's Match
Saving for retirement has long been a substantial hurdle for many workers, and some steps have been taken to help them overcome it. For example, the Retirement Savings Contribution Credit (“Saver’s Credit”) program, implemented in 2002, encouraged low- and moderate-income taxpayers to save for retirement. Unfortunately, the Saver’s Credit was limited in its ability to benefit low-income workers because it was designed as a non-refundable credit. In other words, those with little or no income tax liability received little to no benefit from the program.
In December 2022, the SECURE 2.0 Act addressed the Saver’s Credit shortcomings with a program called the Saver's Match, a vehicle scheduled to largely replace the Saver's Credit. The Saver’s Match goes into effect in 2027, and can be triggered when 2027 federal tax returns are filed in 2028.
The federal government matches up to 50% of what low- to moderate-income earners save for retirement – a match of up to $1,000 per person each year deposited directly into your designated retirement account. For married couples filing jointly, the match applies to each spouse. Matching funds will go into a retirement plan or IRA and grow alongside your own contributions.
As before, there are income limits associated with eligibility:
Saver’s Match rates based on filing status and modified adjusted gross income
Filing status | Full match (50%) | Partial match | No match |
|---|---|---|---|
Married filing jointly, qualifying surviving spouse | Up to $41,000 | $41,001-$70,999 | $71,000 and above |
Head of household | Up to $30,750 | $30,751-$53,249 | $53,250 and above |
Single, married filing separately | Up to $20,500 | $20,501-$35,499 | $35,500 and above |
For more details on the Saver’s Match, see the IRS announcement page here.
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