Houlahan introduces bill to help seniors’ savings

The Retirement Protection Act would suspend the required distribution for some retirement plans.

WEST CHESTER » U.S. Rep. Chrissy Houlahan, D-6th, of Easttown, announced that she has introduced legislation with Rep. Jennifer Wexton, D-Va., to help seniors protect their retirement savings while the economy is struggling due to the COVID-19 crisis. The Retirement Protection Act would temporarily suspend the required minimum distribution (RMD) for defined contribution retirement plans, including 401(k)s, TSPs, and Individual Retirement Accounts (IRAs).

Right now, individuals with these plans are required to begin withdrawing a percentage of their tax-deferred retirement plan when they turn 72 or face a penalty of 50 percent of the amount that should have been distributed.

Houlahan took action on this legislation after hearing directly from several constituents, including Thomas Casalnova of West Chester, and Gene Rodgers of Kennett Square concerned about their retirement savings. As the markets face a historic downturn due to the global COVID-19 outbreak, tax-deferred retirement plans have faced a significant drop in value. Withdrawing funds under these conditions would force individuals on these plans to take serious losses on their investment and jeopardize their economic security in the midst of this health and financial crisis.

Suspending the RMD penalty allows individuals to leave that money in their accounts and avoid a penalty and paying tax on the distribution.

“As we work aggressively on a stimulus package to address the widespread economic impact of the COVID-19 pandemic, this is a commonsense step we can take to help seniors right now,” said Houlahan. “Through telephone town halls, calls, and emails, I’m hearing directly from my community about the things they need to weather this crisis. I’m proud to introduce this pragmatic legislation to ensure our seniors aren’t forced to take money out of retirement while the markets are low, if they don’t need to, and potentially upend their retirement savings plans.”

“Americans’ hard-earned retirement savings plans are being devastated by the economic fallout from the COVID-19 pandemic,” said Wexton. “For households whose account balances have lost value due to the pandemic, withdrawing funds now when the stock market is down forces them to take significant losses on their investments. By temporarily suspending the RMD, families will be allowed to leave money in taxdeferred accounts without incurring a tax penalty, providing time for the markets to recover.”

“I wrote to Representative Houlahan out of concern for my friends and neighbors who are struggling with what the economic impact of COVID-19 means for their retirement savings,” said Rodgers. “Chrissy swiftly responded by introducing legislation to help seniors by allowing them to keep their money in retirement accounts and not forcing them to take a Required Minimum Distribution this year. I’m grateful for Rep. Houlahan listening to her community during this crisis and responding.”

“When I called Representative Houlahan’s office with this concern, she was swift to respond,” said Casalnova. “Being forced to take a distribution from my retirement account right now, during this crisis, would jeopardize my financial stability in the long run.”

Houlahan