Pappas Introduces Bipartisan Bill to Help Caregivers Save for Retirement

Today Congressman Chris Pappas (NH-01) and Congresswoman Claudia Tenney (NY-24) introduced the Expanding Access to Retirement Savings for Caregivers Act with Rep. Debbie Lesko (AZ-08). The bill would allow individuals that took at least one year out of the workforce without receiving an earned income, for the purposes of caring for a family member, to make catch-up contributions in years prior to age 50 to their 401(k) plans, individual retirement accounts (IRAs), and other eligible retirement accounts.

“Individuals who leave the workforce to provide care for a loved one should not be penalized on their retirement and forced to do more with less later in life," said Congressman Pappas. "This bipartisan legislation will allow caregivers to make catch-up payments to their 401Ks, IRAs, and other accounts so they don’t lose out on valuable retirement savings as a result of the time they took to help a family member in need."

“Many individuals across the country take time away from work to care for a loved one, which can result in missed opportunities to save for retirement,” said Congresswoman Tenney. “Those who make such a difficult sacrifice should not be unfairly penalized. Our bipartisan bill would allow caregivers to put their families first without having to miss out on valuable retirement contributions. This would help us move away from a system that disadvantages caregivers and instead offer additional tools for them to contribute to their retirement savings.”

Background:

Under current law, only employees aged 50 and older are eligible to utilize catch-up contributions to make additional deposits to their 401(k) plans, individual retirement accounts (IRAs), and other eligible retirement accounts.

Although using catch-up contributions can be an important mechanism for many Americans to expand their retirement savings, it can still not be enough for individuals that take time out of the workforce to care for family members. These individuals often miss opportunities to save for their retirement for multiple years. This disparity predominantly impacts women, since women are more likely to take more time to act as family caregivers full-time.

The Expanding Access to Retirement Savings for Family Caregivers Act would remedy this element of the retirement system that penalizes caregivers, and introduce new tools for them to contribute to their retirement savings.

Read the full text of the bill here.