A group of Senate Democrats have introduced a bill “designed to help more working families and middle-class Americans save for retirement” – and it brings back MyRA.
The legislation – the Encouraging Americans to Save Act (EASA) – enhances retirement savings incentives by:
- restructuring the existing, nonrefundable Saver’s Credit into a refundable, government matching contribution of up to $500 a year for middle-class workers who save through 401(k) type plans or IRAs (including state-run automatic IRA programs for private sector workers, like OregonSaves);
- making the full 50% credit rate of the existing Saver’s Credit available to taxpayers making up to $32,500 a year/couples with income up to $65,000 (in contrast with the current phaseouts), with those income levels indexed for inflation;
- providing the match to be claimed on the individual 1040 or 1040-EZ income tax form (currently it’s only claimable on the 1040); and
- requiring that the credit above be directly contributed into the saver’s retirement plan or IRA… or – if no account number is provided (or the individual provides an erroneous account number)…
The legislation also reestablishes the myRA, a program established in 2014 to create starter retirement savings accounts for people without access to a 401(k) at work.
With regard to the latter, the legislation also requires the Secretary of the Treasury to educate taxpayers on the benefits of the refundable government matching contribution established by EASA, as well as the MyRA program.
The Trump administration ended myRA in July 2017 after a review of the program and its cost-effectiveness, noting that the program cost $70 million to administer since it was instituted, found that demand for myRAs has been extremely low, and that had the program continued, it would have cost taxpayers approximately $10 million a year to manage the program.
The Encouraging Americans to Save Act is sponsored by Senate Finance Committee Ranking Member Ron Wyden (D-Ore.), along with Sens. Ben Cardin (D-Md.), Bob Casey (D-Pa.), Amy Klobuchar (D-Minn.), and Michael Bennet (D-Colo.).