Wyden Proposal Would Crack Down On Tax Avoidance In Retirement Plans, Create New Opportunities For Working Americans To Save
The existing tax incentives for retirement savings - which will add up to more than
"Taxpayers are pouring dollars into incentives for retirement savings, but still far too many Americans struggle to set money aside after they cover the basics. Tax incentives for savings ought to be available to more working families and more generous to the middle class. A lot of recent college grads are buried under thousands of dollars in student loan debt, but paying down your student loans shouldn't mean you lose out on the opportunity to save with an employer match,"
In addition to cracking down on "mega
* Allow employers to make "matching" contributions to a 401(k) retirement plan while their employees make student loan repayments. Under this proposal, recent graduates who cannot afford to save money above their student loan repayments would no longer have to forego the employer match.
* Make the "Saver's Credit" refundable so that it is available to Americans with no income tax liability, simplify its structure, require that the credit amount be contributed directly to a tax-favored retirement plan and increase its income cap.
* Eliminate Roth conversions for both IRAs and employer-sponsored plans to prevent tax gaming and close the "back door" around income limits.
* Eliminate "stretch IRAs" to prevent taxpayer-subsidized retirement accounts from being used as estate planning tax loopholes.
* Gradually increase the age at which retirement plan participants are required to begin taking distributions from their accounts. The "required minimum distribution" age of 70.5 years has remained unchanged since the early 1960s. In addition, the draft provides that participants who reach the required age with balances in their retirement plans of less than
The RISE Act discussion draft is a detailed legislative proposal, but not final. It is being circulated to stakeholders, members of
A one-page summary of the legislative proposal can be found here http://www.finance.senate.gov/imo/media/doc/RISE%20Act%20discussion%20draft%20one%20pager.pdf. A longer summary can be found here http://www.finance.senate.gov/imo/media/doc/RISE%20Act%20discussion%20draft%20long%20summary.pdf and legislative text can be found here http://www.finance.senate.gov/download/rise-act-draft-legislative-text. A
Read this original document at: http://www.finance.senate.gov/ranking-members-news/wyden-proposal-would-crack-down-on-tax-avoidance-in-retirement-plans-create-new-opportunities-for-working-americans-to-save
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