How This New Legislation Could Help Your Retirement Plans
After all the recent talk of spiraling interest rates, rising inflation, and impending job cuts, there is finally some good news to cheer about. Retirement plan changes may be coming in the form of legislation introduced in Congress.
If the bill passes Congress and gets signed into law, it would translate to significant tax deductions for retirement plan contributions and extensive retirement plan credits. Read on to learn how the proposed provisions can benefit you.
Benefits of the bill if passed:
1. Enhances the retirement savings credit.
The bill would increase the Saver’s Credit from $1,000 to $1,500 while increasing the maximum income eligibility amount.
2. Lifts the required minimum distribution age
It would increase the required minimum distribution (RMD) age from seventy-two to seventy-five. It means retirees will be able to keep more of their retirement assets tax deferred.
3. Increases the catch-up limits for older taxpayers.
The IRA catch-up amount would get indexed for inflation, and the 401(k) catch-up limit would be raised to $10,000 for those over sixty years of age.
4. Student loan payments would qualify for matching contributions.
It will allow employers to pay matching retirement plan contributions for employees based on student loan payments. Many young employees don’t contribute to the 401(k) plan as they are trying to pay off student loans, so this would be a game changer.
Do your homework!
If the legislation works its way through the system and becomes law, we will help our clients take full advantage. So if you would like to understand how the changes can benefit you, get in touch with W R Howell, CPA today.
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