RETIREMENT BILLS AND TAXES
Retirement bills and taxes. Lawmakers are working on the biggest changes to U.S. retirement savings in more than a decade, exploring several proposals that could make it easier for small companies to offer 401(k) plans and for workers to guarantee themselves an annual income after they retire. The efforts are being kick started with a bipartisan Senate bill and house Republicans plan to make retirement and savings a crucial part of their push to get legislation this summer for retirement bills by the fall. It isn’t clear though which, if any measure is likely to survive the legislative process, but the broad interest in encouraging savings gives lawmakers a chance at passing something this year. Retirement bills and taxes.
The retirement bills being considered include a new type of savings account that is more open ended than current vehicles, ways to encourage savings that can be tapped in an emergency and the repeal of a provision that prevents people over age 70 and a half from contributing to Individual Retirement Accounts. Due to the destruction of Retirement Accounts by Covid withdrawals, many are finding they owe the IRS and in need of Tax Resolution. If you are in that category and want to explore the IRS options for Tax Relief, including the IRS Fresh Start Program, simply click on the links for help and information.
The retirement bills also include 401(k) proposals that include requiring plans to disclose to employees the monthly annuity income their savings would support. Other measures would encourage small employers to use automatic enrollment and make it easier for employers of all sizes to automatically raise employees savings rates beyond 10% of income–a cap that now restricts some plans. The retirement bills could face obstacles in a divided Congress in an election year. Still, if passed, the measures for employers to enroll workers automatically and invest their money in funds that shift focus from stocks to bonds as people age.
The discussions are starting with a bill known as the Retirement Enhancement and Savings Act, or RESA, that hasn’t advanced amid a slam congressional election year calendar and partisan tensions over tax policy. However, the bill has attracted support from financial services companies and AARP, the advocacy group for older Americans which says “RESA is an important step to improving retirement policy.”