A bipartisan bill that would allow more caregivers to make catch-up contributions to their 401(k)s and individual retirement accounts has been introduced in the House.
The Expanding Access to Retirement Savings for Caregivers Act, introduced Dec. 13 by Rep. Claudia Tenney, R-N.Y., and Rep. Chris Pappas, D-N.H., is aimed at addressing the disparity that family caregivers face when saving for retirement.
The bill would allow individuals who took at least one year out of the workforce and received no earned income primarily for the purposes of caring for a family member to make catch-up contributions in years prior to age 50. These former caregivers would be eligible to begin making catch-up contributions at age 50, minus the eligible number of years out of the workforce, according to a news release.
"Many individuals across the country take time away from work to care for a loved one, which can result in missed opportunities to save for retirement," Tenney said in the news release. "Those who make such a difficult sacrifice should not be unfairly penalized."
Under current law, only those 50 and over can make catch-up contributions. In 2024, the catch-up contribution limit for such employees who participate in 401(k), 403(b) and most 457 plans will remain $7,500, and for IRAs, the limit will increase to $7,000 from $6,500.
"This bipartisan legislation will allow caregivers to make catch-up payments to their 401Ks, IRAs, and other accounts so they don't lose out on valuable retirement savings as a result of the time they took to help a family member in need," Pappas said in the news release.
