Senate Proposes IRA Contributions After 70 1/2
The Senate has proposed a bill that aims to make retirement saving easier for Americans working past the current retirement age, graduate students and employees of small companies, ThinkAdvisor writes.
The Retirement Enhancement and Savings Act of 2016, which was reported out of the Senate Finance Committee in September, will repeal the current prohibition on traditional IRA contributions by those over the age 70 1/2, according to the publication. The bill, designed to help Americans living and working longer prepare for retirement, was a result of “bipartisan cooperation,” according to Senate Finance Committee Chairman Orrin Hatch, R-Utah, ThinkAdvisor writes.
The bill also includes several provisions to ease the creation and maintenance of multiple employer plans, which are retirement plans adopted by two or more employers unrelated to each other for income tax purposes. Another part of the bill proposes treating certain taxable non-tuition fellowship and stipend payments as part of income for IRA contribution purposes, ThinkAdvisor writes. The provision is aimed at making it easier for graduate and postdoctoral students to save for retirement, according to the publication.
The Senate still has to vote on the bill, according to the publication. The timing of the vote is up to Senate Majority Leader Mitch McConnell, R-Ky., ThinkAdvisor writes.