WASHINGTON, D.C. — The Saver's Match program, authorized by the 2022 Secure 2.0 Act, is scheduled to begin with the 2027 tax year and will provide government matching contributions to low- and moderate-income retirement savers. The program replaces the existing saver's credit and offers eligible individuals up to $1,000 annually for single filers and $2,000 for joint filers.

Under the program, single taxpayers earning up to $20,500—or joint filers earning up to $41,000—will receive a 50% match on retirement contributions up to $2,000. Those with incomes between $20,500 and $35,500 for single filers, or up to $71,000 for joint filers, will qualify for reduced matching amounts. Savers can qualify whether they contribute through a workplace plan like a 401(k) or an individual retirement account.

However, the Saver's Match faces a design conflict: while contributions to either a traditional or Roth IRA can make a worker eligible, the government match can only be deposited into a traditional IRA. This creates a mismatch with state-run auto-IRA programs, which default nearly all participants into Roth IRAs. As of April 30, these state programs held $3 billion across more than 1.2 million accounts, with less than 1% of participants switching from the default Roth to a traditional IRA.

"State programs absolutely want, can and will help their participants take advantage of the [Saver's Match], because these participants are exactly the low- to moderate-income workers the match was designed for," said Angela Antonelli, executive director for the Center for Retirement Initiatives at Georgetown University. "But there is unnecessary administrative complexity because the match must be deposited into a traditional IRA, while state programs default savers into a Roth IRA." Seventeen states currently operate such programs, with Hawaii expected to become the 18th later this year.

"It's in the law," said Ed Slott, IRA expert and certified public accountant. "It specifically says the match can only go to pre-tax accounts, which is kind of weird because contributing to a Roth qualifies for the match, which can't go into the Roth." Resolving the issue may require an act of Congress. A White House official stated in an email that "although specific operational elements of the Saver's Match are still being developed, the expectation is to ultimately allow for both traditional and Roth IRAs." Courtney Eccles, senior vice president of relationship management at Vestwell, added, "In an ideal world, if there was the ability to take those matched dollars into a Roth, I don't think anyone would argue [with] that."