Earlier this month, we gave an explanation of the American Innovation Act, one of three bills that passed the House on September 27 and will go to the Senate for consideration soon. In this blog post, we will talk a bit about the Family Savings Act (H.R. 6757).
So, what is the Family Savings Act of 2018?
This bill is all about making it easier for Americans to save for retirement. According to bill sponsor, U.S. Rep. Mike Kelly (R-PA), “This is about helping every American enjoy a happy retirement and peace of mind in the years when they deserve it most.”
How does this bill make it easier to save for retirement?
The bill covers quite a bit of ground. Some of the more popular facets include:
- Allows traditional IRA contributions regardless of age (currently contributions cannot be made after the age of 70 ½)
- Makes it easier to transfer lifetimeincome investments
- Exempts investors with less than $50,000 in retirement accounts from taking minimum distributions every year
- Expands permitted withdrawals to include up to $7,500 for birth and adoption costs without incurring a penalty
- Encourages small businesses to join together to take advantage of economies of scale on the 401(k) plans they offer to their employees
- Increases the ways in which 529 college savings plans can be used to include the cost of homeschooling, education loan payments, apprenticeship programs, and elementary and secondary school expenses beyond what is currently allowed.
What does this mean for me?
At the moment, not much. Until it is voted on by the Senate, we can’t take advantage of these new provisions. However, many experts think that this part of the tax reform bill has the most likelihood of passing, so you may want to understand the bill so you can make good decisions now as well as when and if the bill passes at a future date.
As always, we are happy to help you plan for the impact of this bill on your personal and business taxes and finances. If you have questions or want our advice on how to minimize your tax burden or start or enhance retirement savings, don’t hesitate to reach out.