Under the bill — dubbed the Addressing Missed-savings Opportunities for Retirement due to an Epidemic Act, or AMORE, Act — individuals who didn't meet this year's federal caps on their 401(k), 403(b) or IRA contributions will get a chance to reach those limits in 2021 and 2022.
The measure aims to allow people hit hard financially by the coronavirus pandemic to make up ground they may have lost on their retirement savings this year, according to Sen. Ted Cruz, one of the bill sponsors. "By allowing catch-up contributions, this legislation will give people the flexibility they need to continue saving for the future," the Texas Republican said in a press release.
The 2020 cap on 401(k) or 403(b) plans is $19,500, and it's between $6,000 and $7,000 for an IRA, depending on the account holder's age. Sens. Thom Tillis, R-N.C., David Perdue, R-Ga., and Kelly Loeffler, R-Ga., also sponsored the legislation and touted it as a way to alleviate some of the financial burden caused by the pandemic.
"The AMORE Act will provide individuals more flexibility to contribute makeup payments to their 401Ks and other retirement savings accounts and give Georgians greater opportunities to build their investments as they save for their futures," Loeffler said in Thursday's release.
The Internal Revenue Service has already granted various forms of relief to those with retirement plans in light of financial strain caused by the global pandemic, including easing minimum distribution requirements and expanding the pool of people who can take penalty-free distributions before reaching the age of 59½.
--Editing by Jay Jackson Jr.
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