A bipartisan bill that would allow individuals affected by federally declared natural disasters to access without penalty their retirement plans, like 401(k)s or individual retirement accounts, to cover emergency costs has been introduced in the Senate.
The bill, introduced Tuesday by Sens. Bill Cassidy, R-La., and Bob Menendez, D-N.J., permanently provides tax relief measures that would automatically apply once a presidential disaster declaration is issued.
While the president can issue a disaster declaration and trigger Federal Emergency Management Agency's authorization to act immediately, Congress usually takes weeks or months to act, the senators said in a news release. Typically, Congress steps in to waive penalties to pay for costs incurred by a given natural disaster, but not always quickly enough.
"When disaster hits, families and business owners should not be penalized when using their savings while trying to get back on their feet," Mr. Cassidy said in the news release. "Saving for retirement is hard enough, let alone during disasters."