Pasadena Congresswoman Encouraging Locals to Save Money

Reps. Judy Chu (D-Pasadena), Jimmy Panetta (CA-20), and Terri Sewell (AL-07) introduced the Encourage Americans to Save Act (EASA).

The bill would update the saver’s tax credit into a saver’s match – a federal matching contribution to middle and low income working Americans who contribute to a retirement savings account, whether they save at work through an employer-sponsored plan or on their own through an IRA.

The bill would offer matching contributions for the first time to millions of individuals not covered by an employer-sponsored retirement plan, including those who save through an IRA under a state or local government program, such as CalSavers.

“We are in a moment of intense economic uncertainty where millions of Americans are worrying about their future and their ability to retire,” said Rep. Chu. “This bill will help provide more security to more families by putting more money directly into retirement accounts. The existing saver’s tax credit leaves out far too many middle and low income families who do not pay enough in taxes to qualify. But these are precisely who out tax system should be assisting.

A 2019 report by the Federal Reserve found that nearly a quarter of all American adults have no retirement savings or pension at all. The saver’s match would both encourage saving and help middle and low income earners save for the future by providing an immediate, meaningful return on their personal contributions.

The saver’s match will also allow more households to participate by updating the income limits to reflect our economic reality, and indexes the income levels to inflation so this credit will be valuable to Americans well into the future.

“This new matching model not only encourages more retirement investments across the board, it puts this money directly into the taxpayer’s account, helping to build savings immediately,” Chu said. “Being able to retire with the security that you will not starve or lose your home should not be an option just for the wealthy. All Americans deserve a chance at retirement. This bill puts that reality in reach for more Americans than ever.”