RealClear Policy: Attack on Roth IRAs Is an Attack on Careful Savers


By: Daniel Savickas

Americans are retiring later than they ever have. According to the most recent data, more than 20% of Americans over 65 years old are working or actively looking for work. This is nearly double the rate in 1985. Further, that same data shows that Americans – on average – are retiring three years later than they were just a few decades ago. With ever-increasing economic uncertainty due to lockdowns and other restrictions, it’s likely this problem will get worse.

One option that Americans have had available for decades to help them retire on their own schedule is to invest in a Roth IRA. Named for former Sen. William Roth (D-Del.), these accounts provide retirement plans where the money going in is already taxed, and growth and most qualified withdrawals from the account are tax-free. They were designed to be a better form of retirement security for working families than traditional investments. It is critical for many future retirees to know they will have a tax-free option at the end of the road.

Unfortunately, Roth IRAs – and those who utilize them – now find themselves under attack by lawmakers in Washington. Sen. Ron Wyden (D-Ore.) is reintroducing legislation that would severely restrict these crucial retirement savings vehicles. The Wyden proposal would limit the amount of money that can be put into these IRAs and cap the amount of allowable growth in the accounts over time. It would also limit the ability for many to move money from sub-optimal retirement accounts into a Roth IRA.

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