Wyden introduces bill to double federal retirement account match

Bend, Ore. (KTVZ) --- Sen. Ron Wyden, D-Oregon, introduced legislation today to double the federal matching contribution for workers saving in tax-preferred retirement accounts. The Savers Match Enhancement Act would increase the maximum federal match from 50% to 100% on eligible contributions made to Individual Retirement Accounts and 401(k) plans, raising the maximum annual match to $2,000 per saver.

The proposal builds on the federal saver's match program created under the bipartisan SECURE 2.0 Act of 2022, which established the first direct federal matching contributions for working Americans' retirement plans. Under existing law scheduled to take effect in 2027, the federal government provides a matching credit of up to 50% on the first $2,000 contributed annually, capping the maximum federal contribution at $1,000 per year.

In addition to doubling the match rate, the proposed legislation would index the $2,000 matching cap to inflation to adjust for future cost-of-living increases. The bill would also expand eligibility by raising the income phaseout range for single taxpayers, moving it from $20,500 to $35,500 under current law up to $42,500 to $57,500.

The measure would also change the saver's match from a pre-tax contribution into an after-tax Roth contribution. Wyden, who led the enactment of the original program in 2022, emphasized the financial challenges facing workers. “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,” Wyden said. “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.”

The proposal specifically targets workers who do not receive traditional employer retirement benefits. Wyden noted the growing number of Americans working outside traditional employment structures who lack access to matching funds. “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,” Wyden said. “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.”

If enacted by Congress, the proposed modifications to the saver's match program would take effect beginning in 2027.