With the recent release of President Obama’s proposed budget and Congressman Dave Camp’s (R-MI), draft tax reform legislation, Individual Retirement Accounts (IRAs) have come into focus. The proposals could have a significant impact on Americans’ ability to save for retirement.
President Obama’s Budget Proposal:
Required minimum distributions (RMDs) for Roth IRAs. Withdrawals would be mandated beginning at age 70-1/2.
Non-spouse inheritors of Roth IRAs required to withdraw all funds within 5 years.
Caps placed on the total amount that could be held against tax-deferred retirement accounts. Savings would be capped at a level that would provide $205,000 in retirement income annually, or about $3.4 million in current total account balances.
Congressman Camp’s Draft Tax Reform:
– Prohibition on contributions to traditional IRAs; new contributions only on an after-tax basis.
– Repeal of rules allowing for recharacterizing Roth IRA contributions or conversions.
– Maximum annual contributions to IRAs (currently $5,500) frozen for 10 years.
The Savings Coalition of America supports incentives for Americans to save their money and ensure a financially secure future. We encourage policymakers to preserve current incentives and work together to adopt policies that encourage increased savings.
Personal Savings Under Stress
After a slight rebound during the most recent recession, Americans’ personal savings rate appears to have resumed its long-term decline.
The Savings Coalition of America was organized in 1991 to support to increase personal savings in the United States. Its mission is to promote and advance policies that will increase the level of personal savings in the United States as well as protect current policies that encourage personal savings. The Savings Coalition also supports increasing awareness of the importance of saving by Americans.
The members of the Savings Coalition represent a wide variety of private interests including engineering, consumer groups, home-building, realtors, tangible assets, trust companies, health care industry, banking, financial services, education, insurance, securities and business groups.
“Money is the opposite of the weather. Nobody talks about it, but everybody does something about it.” – Rebecca Johnson.
SAVING FOR ONE, SAVING FOR ALL
Everyone understands how saving can give people a sense of security and independence. Personal saving is crucial to planning for life’s expected and unexpected events, and for building financial security and freedom. But personal savings is more than just personal – it is fuel for America’s economic engine. Read more...