The Saver’s Match Program has recently announced a new payment of up to $1,000 directly into retirees’ bank accounts beginning in 2027. A new federal program called Saver’s Match will replace the Saver’s Credit, potentially providing a $1,000 tax benefit to 21.9 million Americans when they file their taxes beginning in 2027.
Potential beneficiaries include taxpayers who contribute to an individual retirement account or a retirement plan, such as a 401(k), and earn less than a certain income threshold. Individuals who are eligible include joint filers with an adjusted gross income of up to $40,000 and single taxpayers with an adjusted gross income of $20,000 or less.
A new savings matching program will benefit thousands of retirees
The government will match 50% of contributions made to a qualifying retirement plan up to $2,000 per year, potentially increasing the return by $1,000 per year. Single taxpayers earning $20,000 to $35,000 can also receive reduced payments.
The amount you receive from the government is determined by the contributions you make to your retirement account if you fall into either of those categories. Unlike the Saver’s Credit, the scheme will be open to those who owe taxes.
Furthermore, when the Saver’s Match program is implemented, eligible Americans’ retirement wealth is expected to rise by 12%, according to a Morningstar Retirement study.
Spencer Look, Morningstar’s associate director of retirement studies, believes it is an excellent tool for encouraging savings and advancing behavioral finance concepts. Even if retirees only qualify for a partial match, the government is providing free money to help them retire.
The 3 best bank accounts for retirees in the next 5 years
Retirees devote a significant portion of their lives to working and planning for their golden years, but their work does not end when they leave their jobs. When you’re ready to retire, you should make sure you have the proper banking arrangements in place.
Whether you’re about to retire or just starting out, here are the five types of accounts you’ll need to help you organize your finances for the next chapter of your life. Here are the three types of bank accounts you’ll need to organize your finances for this new stage of life, whether you’re planning for retirement or are already approaching it.
Checking Account
According to Taylor Kovar, CEO and founder of Kovar Wealth Management and a certified financial planner (CFP), having a bank account is essential for managing daily expenses in retirement. A checking account allows you to easily access funds for everyday expenses such as groceries, electricity, and recreational activities.
Furthermore, you can look for a bank account that offers cash back or other incentives on your regular purchases, allowing you to save a small amount of money on purchases you’d have to make anyway. This is especially important for fixed-income retirees, whose retirement budgets may be tighter than during their working years. The majority of rewards checking accounts are available through credit unions and online banks.
High-Yield Savings Account
Having an easily accessible savings account containing your emergency funds is also essential. However, if your money is going to remain in the bank, it should provide a competitive return. By putting your money in a high-yield savings account, you can preserve your purchasing power while also protecting against inflation.
According to Kim Gattis, senior vice president and manager of financial planning at UMB Bank, high-yield savings accounts with an annual percentage yield of around 5% may have additional requirements, such as a minimum opening deposit and access options.
Money Market Account
Another type of bank account that retirees may find useful is a money market account, which provides checking account-like services such as a debit card and the ability to write checks. It allows you to save money with a competitive interest rate.
These accounts frequently offer higher rates on larger balances and have minimum balance requirements. Large sums of money can be saved with them while maintaining some liquidity.
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