The Saver’s Credit, introduced in 2001 and made permanent in 2006, was designed to provide a savings incentive for low- and moderate-wealth households. It provides government matching contributions for individual contributions into retirement accounts, in addition to the regular tax advantage for retirement savings. However, preliminary data from the IRS suggests that the credit has been underutilized.
Economic security in retirement is far from assured for many American families, as recent Woodstock Institute research has shown. Only 52 percent of households have a retirement savings plan, and four out of five older households do not have sufficient assets and income to sustain them through their retirement years. The situation is even bleaker for lower-wealth families: only 10 percent in the lowest income quintile have retirement accounts, while only 30 percent in the second-lowest quintile have retirement accounts.
Woodstock Institute is a member of the Saver’s Credit Alliance and supports efforts to help lower-wealth persons increase retirement security. To join the Saver’s Credit Alliance and receive policy updates, visit to the CFED website.