Home

Senate Will Vote to Revise Retirement Plan Limits

Wed, 09/20/2000 - 12:00am — Karen Stevenson
Description: 

HR1102 has passed out of the Senate Finance Committee and now goes to the Senate floor for a vote. Among other things, this legislation would raise the contribution limits for Individual Retirement Accounts (IRAs). The limit for IRA contributions is currently $2,000 a year, which would be increased to $5,000 a year by the year 2003. In addition, people who are age 50 or older will be allowed to contribute $5,000 in 2001. The IRA contribution limits will also be increased for inflation in the future. The legislation also increases the taxable income levels at which contributions can no longer be made, and sets a provision that IRA funds which are donated to charity will not be included in the taxable income of the donar. Contributions to 401(k) plans, currently limited to $10,000 a year, would be gradually increased to $15,000 by 2005, then indexed for inflation. Employees age 50 and over would be allowed to contribute an additional $5,000 a year to a 401(k) plan.

The bill was passed in the House with broad bi-partisan support. 182 Democratics, 218 Republicans, and 1 Independent voted for it. Only 25 congressmen voted against it, 23 of them Democratic, and 9 members did not vote.

HR1102 has passed out of the Senate Finance Committee and now goes to the Senate floor for a vote. Among other things, this legislation would raise the contribution limits for Individual Retirement Accounts (IRAs). The limit for IRA contributions is currently $2,000 a year, which would be increased to $5,000 a year by the year 2003. In addition, people who are age 50 or older will be allowed to contribute $5,000 in 2001. The IRA contribution limits will also be increased for inflation in the future. The legislation also increases the taxable income levels at which contributions can no longer be made, and sets a provision that IRA funds which are donated to charity will not be included in the taxable income of the donar. Contributions to 401(k) plans, currently limited to $10,000 a year, would be gradually increased to $15,000 by 2005, then indexed for inflation. Employees age 50 and over would be allowed to contribute an additional $5,000 a year to a 401(k) plan.

The bill was passed in the House with broad bi-partisan support. 182 Democratics, 218 Republicans, and 1 Independent voted for it. Only 25 congressmen voted against it, 23 of them Democratic, and 9 members did not vote.