Wyden Introduces Bill to Boost Retirement Savings for American Workers

Wyden Introduces Bill to Boost Retirement Savings for American Workers

The Savers Match Enhancement Act Boosts Federal Match for Workers Contributing to IRAs, 401(k) Plans, and Other Tax-Preferred Retirement Savings Accounts

Summary of the Bill (PDF)

Text of the Bill (PDF)

Washington, D.C. - Senate Finance Committee Ranking Member Ron Wyden, D-Ore., introduced the Savers Match Enhancement Act, which will increase Americans' retirement savings by doubling the federal matching of taxpayer contributions to tax-preferred retirement savings accounts such as Individual Retirement Accounts (IRAs) and 401(k) programs.

"As the cost of living and inflation continue to increase, Americans need more options to help them save for retirement so they can live with dignity in their later years," said Wyden. "This bill would alleviate some of the financial burdens that working Americans face when planning for their retirement and ensure the earnings they are able to set aside for retirement savings will have the largest impact possible."

Wyden has long been a champion of investing in Americans' futures. In 2022, he led the enactment of the saver's match program as part of the bipartisan SECURE 2.0 Act. This legislation is the first time the federal government provides for contributions to the IRAs and 401(k) plans of working Americans. The savers match program serves as a refundable tax credit deposited directly into Americans' retirement accounts.

"While many Americans have jobs that provide 401(k) plans with employer-provided matching, more and more hardworking Americans are self-employed, entrepreneurs or contract-based and do not have access to employer matching contributions. Congress has a responsibility to ensure that all Americans, regardless of how they are employed, have access to a sufficient and reliable source of income once they retire," said Wyden.

Under current law, starting in 2027, a saver may receive a saver's match contribution of up to 50 percent per year of the first $2,000 contributed to a retirement account. Therefore, the maximum federal matching contribution per year is $1,000.

Specifically the bill would:

• Double the matching rate from 50 to 100 percent, so that eligible savers may receive up to $2,000 per year in matching contributions on the first $2,000 they contribute to an IRA or 401(k) plan.

• Index the $2,000 matching cap to inflation, so the amount keeps up with future increases in the cost of living.

• Increase the number of eligible savers for the match by growing the income range to incorporate more middle-class Americans. For example, current law has a phaseout range of $20,500 to $35,500 in income for a single taxpayer. This bill would grow that phaseout range to $42,500 to $57,500 for a single taxpayer.

• Change the saver's match from a pre-tax contribution to an after-tax Roth contribution.

If passed into law, these changes would be effective beginning in 2027.

A summary of the bill can be found here.

The legislative text of the bill can be found here.

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