The Expanding Access to Retirement Savings for Caregivers Act Would Allow Family Caregivers Returning to Work to Start Catch-Up Contributions Sooner
Reps. Chris Pappas (D-N.H.) and Jackie Walorski (R-Ind.) introduced H.R. 3644, the Expanding Access to Retirement Savings for Caregivers Act. The bill would allow individuals that took at least one year out of the workforce without receiving an earned income, for the purposes of caring for a family member, to make catch-up contributions in years prior to age 50 to their 401(k) plans, individual retirement accounts (IRAs), and other eligible retirement accounts.
"Those who leave the workforce to provide care for a loved one should not be short-changed on their retirement and forced to do more with less later in life," said Congressman Chris Pappas. "This bipartisan legislation will help level the playing field so caregivers can begin making catch-up payments to their 401Ks, IRAs, and other accounts sooner and not lose out on valuable retirement savings as a result of the time they took to help a family member in need."
"Taking time away from work to care for a loved one often results in missed opportunities for hardworking Americans – especially women – to save for retirement," Congresswoman Walorski said. "These caregivers should not be penalized for putting their families first. This bipartisan bill would ensure these caregivers have access to critical retirement savings tools by allowing them to start catch-up contributions to their retirement accounts sooner."
BACKGROUND
Under current law, only employees aged 50 and older are eligible to utilize catch-up contributions to make additional deposits to their 401(k) plans, individual retirement accounts (IRAs), and other eligible retirement accounts.
Although using catch-up contributions can be an important mechanism for many Americans to expand their retirement savings, it can still not be enough for individuals that take time out of the workforce to care for family members. These individuals often miss opportunities to save for their retirement for multiple years. This disparity predominantly impacts women, since women are more likely to take more time to act as family caregivers full-time.
The Expanding Access to Retirement Savings for Family Caregivers Act would remedy this element of the retirement system that penalizes caregivers, and introduce new tools for them to contribute to their retirement savings.
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