Roth Bill Pushes for Greater Retirement Savings

Senate Finance Committee Chairman William V. Roth Jr. (R-Del.), namesake of the popular Roth IRA, unveiled legislation that would raise contribution limits for individual retirement accounts and 401(k) plans, and also includes a tax break for small businesses that set up pension plans for their workers. The bill, similar to a measure the House passed in July, would raise annual contribution limits to 401(k) plans from $10,500 to $15,000. For IRAs, the limits would rise from $2,000 to $5,000 a year. In addition, a new 401(k) option would be created that, like the Roth IRA embraced by millions of people, would let people contribute after-tax dollars that could later be withdrawn tax-free. There also would be a “catch-up” provision for people over 50 to contribute up to $7,500 a year to an IRA, aimed primarily at women who left the work force to raise children and haven’t been able to keep pace with their retirement savings. “Despite a roaring economy, many Americans still are not saving enough money for retirement,” said Roth. The measure, one of the top remaining priorities for the GOP leadership, is scheduled to be considered by Roth’s Senate Finance Committee on Thursday.