The saver's credit, enacted in 2001 as part of the Bush administration's tax cut legislation, provides a government matching contribution for voluntary individual contributions to 401(k) plans, individual retirement accounts (IRAs), and similar retirement savings arrangements. It is the first and only major federal legislation directly targeted to promoting tax-qualified retirement saving for moderate- and lower-income workers. Yet its current status as both temporary-it is scheduled to expire in 2006-and nonrefundable hinders its ability to be a real help to low- and middle-income families. This policy brief outlines several ways to improve the credit. [© Brookings Institution]

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