The Senate’s new retirement proposal could get you more money in your 401(k)

In an ongoing effort to build Americans’ retirement security, senators introduced the “American Savings Act” on Thursday to boost contributions to retirement accounts. .

Recommend, if pass, will change the existing non-refundable savers credit to a refundable credit matching retirement account contributions of up to $1,000 a year for those with 401(k) plans, and individual retirement accounts. Senator Ron Wyden, a Democrat from Oregon and Chairman of the Senate Finance Committee, introduced the bill along with six of his colleagues.

Technically, the proposal states the credit would be 50% of contributions up to $2,000, which means that a worker who contributes $2,000 to her 401(k) would receive the credit. use $1,000. An individual who puts $1,000 in his or her IRA will receive a credit of $500. The credit will be transferred to a retirement savings account.

Yes income limit Credit. Single individuals must earn no more than $32,500 to receive full credit, and couples applying together must have income up to $65,000, according to the Senate. Match amounts will be phased out over the next $10,000 for eligible individuals and $20,000 for eligible couples, and the cap cap will be adjusted for future inflation.

Currently, the retirement saver of Credit equal to 50% of a person’s contribution to a retirement account. For single individuals, their adjusted gross income cannot be more than $19,750; for the head of household, not more than $29,625; and for married people filing jointly, no more than $39,500. Credits may also be phased out above those limits. The current credit is non-refundable, which means it may reduce a person’s tax bill, but will not generate a refund. | The Senate’s new retirement proposal could get you more money in your 401(k)


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