Congressman Panetta Co-Introduces Legislation to Encourage Retirement Savings
WASHINGTON, DC – Today Congressman Jimmy Panetta (CA-20) announced that he co-introduced the Encourage Americans to Save Act (EASA). This bill will update the saver’s tax credit into a saver’s match, a federal matching contribution to middle- and low-income working Americans who contribute to a retirement savings account, whether they save at work through an employer-sponsored plan or on their own through an IRA. The legislation is sponsored by Congresswoman Judy Chu (CA-27) and co-introduced by Congresswoman Terri Sewell (AL-07).
The bill will offer matching contributions for the first time to millions of individuals not covered by an employer-sponsored retirement plan, including those who save through an IRA under a state or local government program, such as CalSavers. A 2019 report by the Federal Reserve found that nearly a quarter of all American adults have no retirement savings or pension at all. The saver’s match would both encourage saving and help middle and low income earners save for the future by providing an immediate, meaningful return on their personal contributions. The saver’s match will also allow more households to participate by updating the income limits to reflect our economic reality, and indexes the income levels to inflation so this credit will be valuable to Americans well into the future.
“There are inefficiencies and inequities in the personal savings incentives under current tax policy, especially for families with lower incomes and fewer resources. The Encouraging Americans to Save Act will improve upon and expand savings incentives in the tax code, helping more Americans put money away for retirement and increasing their long-term financial security,” said Congressman Panetta. “The current savers credit benefits too few families, and leaves out lower income potential savers without tax liability. By providing a 50% match of retirement plan contributions, regardless of a savers’ tax liability, the Encouraging Americans to Save Act would address a major gap and help Americans invest in their future.”
“We are in a moment of intense economic uncertainty where millions of Americans are worrying about their future and their ability to retire,” said Congresswoman Chu. “This bill will help provide more security to more families by putting more money directly into retirement accounts. The existing saver’s tax credit leaves out far too many middle and low income families who do not pay enough in taxes to qualify. But these are precisely who out tax system should be assisting. This new matching model not only encourages more retirement investments across the board, it puts this money directly into the taxpayer’s account, helping to build savings immediately. Being able to retire with the security that you will not starve or lose your home should not be an option just for the wealthy. All Americans deserve a chance at retirement. This bill puts that reality in reach for more Americans than ever.”
“Low income workers in Alabama and across the country are especially vulnerable to financial instability and have fewer opportunities to build a secure retirement,” said Congresswoman Sewell. “Too often, those who need the most support do not benefit from existing retirement savings incentives. Through the creation of a saver’s match, the Encourage Americans to Save Act will give these workers an immediate return on their investment and ensure they can build a path toward a financially secure future.”