The Tax Credit Few Know Of…
THE IRS…
A little-known retirement tax credit, dubbed the Saver’s Credit, could save millions of Americans thousands of dollars, yet it remains underutilized due to widespread ignorance.
The credit incentivizes retirement savings by offsetting contributions to plans like 401(k)s or IRAs. Single filers can claim up to $1,000, while married couples filing jointly may receive up to $2,000, depending on income and contributions. However, a Transamerica Center for Retirement Studies report reveals a stark awareness gap: only 51% of eligible workers know about it.
THE SECRET…
Catherine Collinson, CEO of the center, describes it as a “well-kept secret,” emphasizing its potential to benefit low- to moderate-income savers who often overlook it. The credit aims to encourage long-term financial security, but its obscurity means many miss out on significant tax relief.
Financial experts urge eligible Americans—particularly those juggling tight budgets—to explore this opportunity when filing taxes. With retirement costs rising, the Saver’s Credit could prove a game-changer for those who claim it, offering a lifeline to bolster savings. Yet, without better education and outreach, this valuable tool risks remaining buried, leaving billions in unclaimed benefits on the table.