Here's Who Will Qualify for a $1,000 Government-Backed IRA Match in 2027

A long-talked-about retirement account change is set to take effect next year that could affect millions of savers. President Donald Trump recently signed an executive order to create TrumpIRA.gov, a planned website that will enable workers without access to a workplace retirement plan to gain access to IRAs that offer the federal Saver's Match established by legislation in 2022.

This is similar to a 401(k) match, but the funds will come from the federal government instead of your employer. However, not everyone will qualify.

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How the new Saver's Match will work

The Saver's Match was created as part of the SECURE 2.0 Act, passed at the end of 2022, but it's not scheduled to take effect until next year. This new matching option will replace the Saver's Credit, which rewarded low-income households who saved for retirement by lowering their tax bills.

The Saver's Match is a 50% match on up to $2,000 in contributions to a qualifying IRA. This means you can earn a maximum credit of $1,000. But there are income limits that bar middle- and high-income households from taking advantage of this program, even if they lack access to an employer-sponsored retirement plan.

In 2027, single filers must have modified adjusted gross incomes (MAGIs) below $20,500 to be eligible for the entire match; this number is $41,000 for married couples filing jointly. Single filers with MAGIs between $20,500 and $35,500 will be eligible for a reduced match, as will married couples with MAGIs between $41,000 and $71,000. Those with higher MAGIs will not be able to claim the Saver's Match at all.

A $1,000 match may not seem like much, but it could go further than you think if you leave it invested for a few decades. A single $1,000 investment could be worth nearly $17,500 after 30 years, if you earn a 10% average annual return. In reality, you'd wind up with a lot more because you have to contribute $2,000 of your own money to earn the match in the first place.

The problem with the Saver's Match

The Saver's Match is supposed to help those who lack access to a 401(k) through their jobs -- and thus, have no opportunity for a 401(k) match -- to grow their retirement savings more quickly. It's a good idea, but it ignores the fact that many families in the eligible income ranges would struggle to save $2,000 of their own money to get the match in the first place.

However, even if you can only claim a partial match, it's worth doing. Every dollar you set aside will improve your financial readiness for retirement, so don't rule out the Saver's Match just because you can't claim the entire amount.

Once the official website launches next year, explore the options available to you and consider stashing money in one of these accounts first, so you can get as much of your government-backed match as possible.

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