Snowe Praises Senate Passage of Bill to Help Retirees Save Money in Troubling Times
December 11, 2008
Washington, D.C. - U.S. Senator Olympia J. Snowe (R-Maine) today applauded final passage of H.R. 7327, the Worker, Retiree and Employer Recovery Act of 2008, a bill that will provide relief to seniors who are currently forced to withdraw money from their retirement accounts. The legislation will delay the mandatory withdrawal by providing a one-year waiver to the rule for 2009.
"This legislation provides essential relief to retirees who are counting on the money they’ve saved during a lifetime in these retirement accounts," said Senator Snowe. "It’s absolutely critical that we do everything we can to help those struggling during these devastating economic times and I am pleased that Congress finally made this a priority."
Furthermore, Senator Snowe cited legislation she introduced on Monday that will go further to help retirees by delaying the mandatory withdrawal of savings through 2010. Such a suspension will potentially give retirement accounts, such as IRAs and 401(k)s, an opportunity to recoup financial losses suffered in the last year. Furthermore, the legislation would allow retirees to recontribute to their retirement accounts the amount they were required to withdraw in 2008.
"It is no secret that pensions were a primary casualty of the massive stock crashes of the past year," Senator Snowe said. "And we must do more to help retirees recover their life savings. By delaying the mandatory withdrawal through 2010, we can give individuals time to recover their losses and not require them to prematurely withdraw their hard-earned savings."
Under current law, individuals who have reached age 70.5 must generally begin to withdraw funds from their IRAs or defined contribution retirement plans, including 401(k), 403(b), and 457 plans. The withdrawals must begin by April 1 of the year in which an individual attains age 70.5. A failure to take a required minimum distribution may result in a 50 percent excise tax on the difference between what must be withdrawn and the amount actually distributed.
The bill now goes to the President for signature.
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