The House Ways and Means Committee voted on Tuesday to advance several pieces of legislation aimed at encouraging retirement savings among Americans and strengthening their long-term financial security.
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Among the provisions called for are a couple aimed at increasing the flexibility associated with retirement accounts. If approved, individuals would be allowed to stash money into IRA accounts beyond the current age limit of 70 1/2. It would also delay when individuals are required to begin taking required minimum distributions to 72, from 70 1/2.
Lawmakers are hoping to incentivize small businesses to offer private retirement plans to their employees by awarding tax credits of up to $500 for those that automatically enroll workers.
The legislation seeks to make it easier for companies to band together to offer 401(k) plans.
Traditional 401(k) plans would be encouraged to offer annuities to participants as well, through being awarded certain legal protections.
“Our reforms will help families save more and earlier for the future, ensuring folks have the flexibility and control over their own savings they need for whatever life throws their way,” the top Republican of the House Ways and Means Committee, Rep. Kevin Brady, R-Texas, said in a statement last week.
Lawmakers are also pushing updates to 529 college savings plans, which would allow the funds to be used for other education-related expenses, such as private schooling and apprenticeships.
Retirement reform is one of a few efforts in Congress believed to have bipartisan support. Major reforms haven’t been enacted in more than a decade.
Another bill was approved that aims to reform the IRS – including changes that would help protect taxpayers from fraud.
The package of bills will need to be approved by the full House, before being taken up by the Senate.