Senators introduce bill to allow catch-up retirement contributions

A group of Republican senators introduced a bill Thursday that would permit individuals to make catch-up contributions to their retirement accounts in 2021 and 2022 if they're unable to make full contributions in 2020.

The Addressing Missed-savings Opportunities for Retirement due to an Epidemic Act, or AMORE Act, introduced by Sens. Ted Cruz of Texas, Thom Tillis of North Carolina, and David Perdue and Kelly Loeffler of Georgia, would allow individuals who don't make full contributions this year to their retirement accounts, including 401(k) plans, 403(b) plans and individual retirement accounts, to make catch-up contributions in 2021 and 2022 equal to the difference between their actual contributions and current federal limits on those accounts, the senators noted in a news release.

In 2020, the contributions limits for 401(k) and 403(b) plans are capped at $19,500 while IRAs have a limit of is $6,000, or $7,000 for those age 50 and older.

The bill was introduced to help people struggling to save for retirement, Mr. Cruz said in the news release. "The unprecedented economic challenges we're facing have threatened the livelihoods and life savings of millions of hardworking men and women across the country," Mr. Cruz said. "As we work to get our economy back on its feet and help Americans safely return work, we must also help ensure this crisis does not result in a permanent detriment to Americans' retirement savings."

Ms. Loeffler said the bill would provide people with more flexibility in saving for retirement.

Added Mr. Perdue in the news release, "With millions of Americans unemployed and many more faced with reduced hours, both employers and employees have scaled back retirement contributions to meet their current day-to-day needs. The AMORE Act will allow hardworking Americans to catch up on their retirement contributions as the economy recovers. This critical bill helps preserve millions of Americans' retirement plans while removing one less worry in these unprecedented times."