NY Times: For Freelancers, New Federal Help in Saving for Retirement (January 6, 2023)

Thomas Fuchs, in his New York Times Article, “For Freelancers, New Federal Help in Saving for Retirement,” discusses aspects of the new benefits offered for nontraditional workers in the recently passed Secure 2.0 Act, particularly the option of “saver’s match.” The article begins as follows:

Even though many gig workers are financially savvy, many worry about falling short of money in retirement, Pew found. “They know they should be doing more,” said Alison Shelton, a senior research officer in Pew’s retirement savings project, but they may not have the means.

Much of the Secure 2.0 Act, the retirement law signed by President Biden in late December, focuses on enhancing workplace savings options, but some provisions can also benefit nontraditional workers. Notably, the law introduced a “saver’s match,” a new incentive to help low- and moderate-income workers build a nest egg by providing a direct government contribution to their retirement account. (The option will eventually replace the so-called Saver’s Credit.)

Under the new program, the federal government will deposit a 50 percent match on up to $2,000 of a worker’s contribution to a workplace or individual retirement account — a maximum of $1,000 per person. Eligibility is based on income, and the match is reduced over certain limits. Single filers can earn up to $35,500, and joint filers up to $71,000, and qualify for at least a partial match.

“It’s a more effective way of getting people to save,” said Tim Steffen, director of tax planning at Baird Private Wealth Management.


Click here to view Thomas Fuch’s summary of “For Freelancers, New Federal Help in Saving for Retirement”

Posted by Melissa Zheng, Associate Editor, Wealth Strategies Journal.

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