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Rehberg Celebrates National Save for Retirement Week By Introducing Legislation to Encourage Retirement Savings

10/23/09

WASHINGTON, D.C. – Montana’s Congressman, Denny Rehberg, today introduced legislation to encourage retirement savings even during difficult economic times. The Securing Tomorrow by Saving Today Act, introduced during National Save for Retirement Week which runs October 19 – 25, addresses several complimentary approaches to personal retirement savings.

"During National Save for Retirement Week, we are reminded that economic recovery comes from the hard work of the American people and that reinvestment will come from empowering individuals to save and invest for the future," said Rehberg, a member of the House Appropriations Committee. "At a time when Americans are struggling to meet their immediate financial obligations, putting money aside for the future can seem impossible. Yet, failure to save today will lead to an insecure financial future."

Rehberg’s legislation includes several, simple policies to encourage Americans to save, both through traditional savings accounts as well as Individual Retirement Accounts (IRAs) and employee-sponsored retirement plans. It is aimed at helping individuals, families, those approaching retirement and seniors who are already using these savings methods or who need encouragement to save more during these tough times.

The provisions fall into the following three themes: 1) Traditional savings accounts; 2) IRAs and their contribution limits; 3) Addressing minimum distributions from retirement accounts for seniors. Specifically, the legislation would do the following:

  • Exclude up to $500 (twice that amount for married couples) of interest income from gross income annually.
  • Permanently increase the IRA contribution limit from $5,000 per year to $16,500 (the current employer-sponsored plan limit).
  • Temporarily double the contribution limit to employee-IRAs and employer-sponsored plans from $16,500 to $33,000.
  • Temporarily increase the catch-up contribution cap for employee-IRAs and employer-sponsored plans to $10,000.
  • Temporarily suspend requirements for minimum distributions from tax-deferred retirement plans. This provision mirrors legislation Rehberg introduced last Congress that permitted seniors to forgo their required minimum distribution from their IRAs, 401k accounts, or annuities. Currently if a senior does not take their required minimum disbursement (RMD) after age 70 ½, they are heavily penalized. Although Congress has temporarily suspended RMDs for the year 2009; this bill would extend that suspension through 2012 to allow further time for the market to stabilize.