Encouraging the Use of the Saver’s Credit through VITA SITES: Evidence from a Pilot Demonstration in Two Cities

1040formThe Retirement Savings Contribution Credit, or Saver’s Credit, was created to encourage greater retirement savings among lower-income households; however, those eligible for the credit have made limited use of the program.  This article by Jonathan Spader, Emily Holt, Nicole Fiore, Christopher Blaine, Holden Weisman, and Jackie Lynn Coleman reviews a pilot study aimed at encouraging the use of the credit among VITA clients.

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A web -based survey and focus groups provided further information.  Results reaffirm that awareness of the credit is low.  Although respondents were interested in both saving for retirement and the incentives associated with the credit, limited resources and uncertain incomes created obstacles to building and protecting retirement savings.  While VITA sites have the potential to reach a large number of filers, they have limitations for a broader outreach campaign.  Although the Saver’s Credit creates valuable incentives for many VITA clients, because households with no tax liability cannot benefit from the credit, it has no value for the majority of VITA clients. Further, successfully facilitating the use of the Saver’s Credit at VITA sites requires a relatively long time frame.