New Bill Would Boost IRA, Retirement Plan Contribution Limits for 1 Year
Contribution limits for 2023 would be $24,500 for workplace retirement plans and $10,000 for IRAs.
House Republicans have introduced the Retirement Protection Act of 2022, which would increase the contribution limits for workplace retirement plans and IRAs — traditional and Roth — by $4,000 over the IRS-set limit for one year after enactment.
Under the bill, the contribution limits for 2023 would be $24,500 for workplace retirement plans and $10,000 for IRAs.
The bill was introduced by Rep. David Schweikert, R-Ariz., and Byron Donalds, D-Fla., at the end of July.
Schweikert said in a statement that “allowing Americans to contribute more to their retirement accounts not only helps hardworking individuals add to their savings, but also serves as an alternative for funds that might be spent on inflated goods elsewhere. If we are going to defeat unprecedented inflation, we must think about long-term solutions. And this bill accomplishes just that.”
The House passed its version of Secure Act 2.0, officially called the Securing a Strong Retirement Act of 2022, in March.
The Senate Finance Committee passed by voice vote on June 22 the Enhancing American Retirement Now (EARN) Act, bipartisan legislation that’s intended to be included in the Senate’s version of Secure Act 2.0.
The Senate Health, Education, Labor & Pensions Committee passed by voice vote on June 14 the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg, or Rise & Shine, Act.
The bills from the HELP Committee and Finance Committee will be combined to make up the Senate’s Secure Act 2.0 package. The Retirement Protection Act may be included in the combined legislation.
Donalds added that “as we continue to stare down economic uncertainty and officially enter into a recession, financial planning is more important than ever. By increasing the contribution limits for IRAs and other retirement plans, Americans everywhere will be able to better prepare themselves for the future.”
The Retirement Protection Act also sets the Savers’ Credit to 50% of contributions, amends the threshold amounts to get the 50% credit, and adjusts the thresholds for inflation.