Contact: Kristin Lawton, 202.408.9788
Jan 28, 2010
CFED Applauds President Obama for expanding the Saver's Credit
It was announced today that President Barack Obama will include an expansion of the Saver's Credit in his 2011 budget as a component of the agenda of the White House Middle Class Task Force, as well as in the State of the Union Wednesday Night. The Savers Credit will increase the net worth and retirement security of as many as 50 million low- to moderate-income working American families and could increase their assets by as much as $44 billion.
CFED, a national nonprofit dedicated to expanding economic opportunity for all Americans, is one of the organizations leading efforts to pass the Saver's Credit. "We commend the Obama Administration for prioritizing asset building as part of their solution to financial distress for America's middle class families. The President and his team are right to seek solutions to rising levels of asset poverty."
The Saver's Credit was conceived and designed to incent savings in retirement accounts for low- and moderate-income households by providing a financial match for working households. However, due to a design flaw, fewer than 6 million workers annually claim this credit, a substantial underutilization of the policy.
Reform measures supported by the Administration and Congress would benefit more than 50 million Americans include:
- Provide a flat 50% match on deposits into qualified retirement accounts up to $1,000/$500 per year for joint/single filer
- Automatically deposit this match directly into a designated account through submission of IRS Form 8888
- Extend this benefit to households earning less than $65,000
An expanded Saver's Credit will build on the expansion of automatic enrollment in employer-sponsored accounts and employer innovation for automatic enrollment into IRAs to enable families to build a larger nest egg for their retirement and for other eligible uses.
CFED recently launched the Saver's Credit Alliance, a coalition of the corporate sector, nonprofit sector and national organizations who support the expansion.
CFED is also a leading expert on matched savings accounts and automatic IRAs – both of which have been listed in the top five key investments for families by Vice President Biden's Taskforce for Middle Class Families.