The government can give you up to $1,000 more dollars in your retirement accounts
In recent years, the American government there are various legislative changes aimed at helping citizens recover their savings after the COVID-19 pandemic. This is how the program was born Saver’s gamewhich can give up to $1,000 dollars free of charge retirement accounts to people who meet certain requirements.
It should be noted that the Ley SECURE 2.0 in late 2022, updating a SECURE Act enacted in 2019, there is a new provision known as the Saver’s Match, which states that starting in 2027, the government will match 50% up to $2,000 per year that people can contribute to different types of retirement accounts. , such as 401(k), 403(b), traditional IRA, and SIMPLE IRA.
That is, for every contribution Americans make to their retirement accounts in a year up to $2,000, the government will give them half the amount; This means that workers can receive up to a total of $1,000 completely free, which will be added to their retirement. In other words, if someone puts $1,000 dollars a year into their retirement account, they will receive $500 dollars; If you contribute $500, you will receive $250, and so on.
Also, as a plus for workers, the match doesn’t count toward the person’s annual contribution limits, meaning that even if you max out your 401(k) or IRA contributions, you can still have an additional $1,000. You just have to remember that these contribution limits change every year and this law comes into force in 2027.
How to pay your retirement accounts?
The money the government gives you is automatically deposited into your retirement account, so workers don’t have to claim it on their taxes. This law only applies to pre-tax retirement accounts, such as IRAs and traditional 401(k)s. Roth accounts, which are after-tax, do not get any 50% match from the government.
Who is eligible to receive the Saver’s Match?
Like tax credits (although it’s not), the government will distribute this money before the one-way test. Access to Saver’s Match will be eliminated above certain income limits to target low- and middle-income individuals.
For tax year 2027, you must earn less than the following criteria to receive the maximum $1,000:
- Single filers: $20,500 dollars
- Head of household: $30,750 dollars
- Joint filers: $41,000 dollars
If your income exceeds these amounts, the contribution will be waived until reaching the following limits:
- Single filers: $35,500 dollars
- Head of household: $53,250 dollars
- Joint filers: $71,000 dollars
Thresholds are adjusted annually based on inflation. That means that, in later years, you may qualify for a partial equalization, even if it exceeds the 2027 limits.