The Setting Every Community Up for Retirement Enhancement Act of 2019 and its follow-up, the Secure 2.0 Act of 2022, made significant changes to the retirement savings landscape.
Now, with midterm elections on the horizon, a divided government seems increasingly likely for 2027. Many industry experts view that prospect as creating prime conditions for a bipartisan Secure 3.0 Act.
Such legislation likely would build upon auto-enrollment policies percolating at the state and federal level, as well as the soon-to-be effective Saver's Match program. Advisors would be well served to start monitoring proposals and preparing for potential changes around expanding access to retirement savings.
A Government IRA Program
As of the 2025 tax year, employers that establish 401(k) or 403(b) plans must auto-enroll employees in such plans. The minimum auto-enrollment contribution rate ranges from 3% to 10%, although individuals who are automatically enrolled can opt out.
Political momentum seems to be growing to go even further — creating a federally run individual retirement account savings program that would create IRAs for the millions of Americans who don't have access to an employer-sponsored retirement plan.
By some estimations, the wealthiest 1% of American households hold about 30% of all American wealth. Two-thirds of American wealth is held by the wealthiest 10% of Americans, while the bottom 50% hold only roughly 2.5% of wealth.
President Donald Trump expressed interest in a federal IRA program during the recent State of the Union address. While providing few details, he indicated that a federal savings match would be available to lower-income workers who participate in the program. The program likely would be administered like the Trump accounts created by last summer's tax and spending megabill.
In addition to federal political considerations, several states — including conservative Utah and Mississippi — have started establishing state-run retirement savings programs.
Leveraging the New Saver's Match
Some support expanding the Saver's Match program, from the Secure 2.0 Act, that goes into effect Jan. 1.
Current law provides a nonrefundable tax credit, known as the saver's credit, for certain lower-income taxpayers who contribute to their retirement plans. Beginning in 2027, it will be replaced by a 50% matching contribution from the federal government to be deposited into existing 401(k)s and IRAs. That match will be limited to $2,000 (for joint returns, $1,000 per individual filer) and will be subject to phase-out based on income levels.
A Secure 3.0 Act could expand the income eligibility thresholds to make the federal match available to a wider range of taxpayers. Such a boost could be accompanied by a federally established IRA program that would automatically give lower-income taxpayers access to a retirement account.
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