Congressman Steve Scalise yesterday helped pass legislation to protect seniors' pocketbooks. The pension relief bill (H.R. 7327) will give senior citizens the option to defer an otherwise mandatory withdrawal from their Individual Retirement Account (IRA) during tough economic times.
"Under current law seniors only have the option of withdrawing their investments at a large loss, or facing stiff penalties from the IRS," Scalise said. "This bi-partisan bill gives seniors the option to withdraw funds from retirement accounts or leave the money there while the financial markets recover, without facing large IRS penalties."
Under current law, the federal government mandates individuals to begin withdrawing from their IRA and 401 (k) accounts when they turn 70 ½ years old. During the recent economic hardships, withdrawing could force some seniors to lose large percentages of their investments as their retirement accounts have not yet recovered from the market losses.
This bill (H.R. 7327) would put a moratorium of the IRS rule for 2009. This means seniors will not be forced to withdraw funds from their investment accounts next year. Congressman Scalise also urges the U.S. Senate to take up and pass the bill by the end of this week.
Scalise said, "We need to act quickly to get this relief for our seniors. We did our part in the House, now the Senate needs to step up and do the same, so we can get the bill to the President before the end of the year."
Congressman Scalise worked with the Internal Revenue Service (IRS) and Members of the House of Representatives to emphasize the need to create the temporary waiver.