William Roth will go down in history as the man who made America save for its collective retirement. After giving his name to the phenomenal Roth IRA, you’d think he could rest on his laurels and, well, retire. Instead, Roth has a new Roth baby in the works.
The plan, unveiled in the Senate on Wednesday, would raise contribution limits for both regular IRAs and 401(k) plan. Furthermore, a new 401(k) option would enable people to contribute currently taxed dollars to a 401(k) and ultimately withdraw the money tax-free.
The bill would raise the annual 401(k) contribution limit from its current $10,500 to $15,000, and the IRA annual contribution limit would go from $2,000 to $5,000.
In addition, a proposed option would allow a catch-up provision for taxpayers who are over age 50, allowing them to contribute up to $7,500 per year to an IRA.
As usual, the White House has chosen not to support this measure, even though a similar bill passed in the House of Representatives earlier this year and many Democrats in both chambers support the measure. Clinton and Gore prefer legislation that would favor government-funded retirement plans for low-income people.
The retirement savings bill may find itself being used as a bargaining tool for other tax legislation under discussion.