NU Online News Service, Oct. 10, 6:50 p.m. – The U.S. House of Representatives today placed H.R. 5558, the Retirement Savings and Security Act of 2002, on the Union Calendar.
Placement on the calendar does not guarantee that a bill will actually reach the House floor, but it can be one of the steps along the way to the floor.
If the bill were enacted, it would speed up full adoption of retirement savings tax breaks included in the Economic Growth and Tax Relief Reconciliation Act of 2001.
The bill would increase the amount of ordinary individual retirement arrangement contributions that individual taxpayers could deduct from 2003 taxable income to $5,000, from the current limit of $3,000.
Under existing law, the IRA contribution limit would increase to $5,000 in 2008.
The bill would also increase the limit on 2003 contributions to 401(k) plans and most other defined-contribution retirement plans to $15,000, from $11,000, and it would increase the age when retirement account holders have to begin taking cash out of the accounts to 75, from 70.5 years.
Under existing law, defined-contribution plan contribution limits would increase to $15,000 in 2006, and the minimum required distribution age would increase to 75 in 2007.
The House Ways and Means Committee approved the bill Tuesday by a 24-10 vote.
Opponents have argued that the bill is too expensive. An analysis from the Joint Committee on Taxation shows it would cost the country $1.6 billion in 2003, $3 billion in 2004 and $2.7 billion in 2005.
But House Ways and Means Chairman Bill Thomas, R-Bakersfield, Calif., the bill’s sponsor, argues that it could help shore up the economy.
H.R. 5558 and other proposed retirement and investment reform bills “are a continuation of our efforts to help America’s seniors have a safe and secure retirement,” Thomas says in a statement.
Links to the full text of the bill and other information about the bill are on the Web at http://thomas.loc.gov/cgi-bin/bdquery/z?d107:h.r.05558: