Of Interest

New Bill to Raise Maximum Contributions for IRAs & 401(k)s

The House Ways and Means Committee has approved a bill that would dramatically increase maximum allowable contributions to IRAs and 401(k) plans. The vote was 27 to 9, and 5 Democrats joined 22 Republicans in favor of the bill, which will now go the House floor.

Should the bill, which appears to have strong bipartisan support, become law, the present $2,000 maximum annual contribution to IRAs would increase over three years to $5,000. This would apply to both conventional and Roth IRAs. The maximum annual employee contribution to 401(k)s would increase to $15,000 from $10,500 over five years.

According to Rep. Rob Portman (R-OH), who co-authored the bill with Rep. Benjamin Cardin (D-MD), this legislation "responds to the fact that pension coverage and retirement savings today is wholly inadequate at a time when it is badly needed."