Bergman Proposes Financial Protection for Seniors During COVID-19 Market Impact
Today, Rep. Jack Bergman announced new legislation to protect Seniors’ retirement accounts as COVID-19 continues to drag down the stock market.
Under current law, Seniors age 72 and older must take required minimum distributions (RMDs) out of their traditional IRAs and other tax-deferred retirement savings plans. Seniors face a 50 percent tax penalty on the required withdrawal amount if they do not complete their annual RMD. For 2020, the minimum withdrawal amount is based on a percentage of a Senior’s account balance as of December 31, 2019 – more than a month before the stock market’s sudden and sharp decline from coronavirus fears. This is bad news for Seniors who will have to drain a percentage of their savings that is now much larger than was anticipated at the beginning of the year. Rep. Bergman’s proposal would temporarily suspend RMD penalties in 2020, allowing Seniors the flexibility to keep more money in their retirement accounts and give the stock market a chance to recover losses.
“The COVID-19 pandemic has brought a new level of uncertainty to every American family and business, and I am working with my colleagues in Congress to address the full impact of this sudden shock. It is important we also safeguard the health and financial stability of Seniors in our nation’s response to the crisis. Older Americans deserve a chance to regain value on their hard-earned savings in the midst of abrupt, Coronavirus-induced stock market losses. For this reason, I am proposing to suspend tax penalties on Seniors who do not withdraw the minimum required funds from their retirement plans.”
You can read the proposed legislation here.