The Senate Finance Committee has unanimously voted to increase opportunities for individuals contributing to retirement savings.
So what does this mean for retirement planning? Contributions into IRAs would increase from $2,000 to $5,000 while 401(k) contributions will increase from the current maximum of $10,500 to $15,000.
Small businesses will find it easier to offer employee pension plans and workers over 50 will be able to increase contributions to make up for the inability to do so earlier. Increased contributions will also be offered to workers who have left the work force temporarily.
The bill has also expanded to allow low and moderate-income investors to take a tax credit up to 50% of retirement contributions (maximum $2,000 contribution), depending on income. The non-refundable credit would apply to married taxpayers with income under $50,000 and single taxpayers with income under $25,000.
The bill goes to the Senate floor next week. Read the full text of the proposed legislation.