A Break On Student Loans In New Retirement Bill? Here's How

No matter who wins next week's presidential election, lawmakers from both parties are behind a bill that helps out Americans with both their student loans and their retirement savings.

The top Democrat and the top Republican on the House Ways and Means Committee, which handles most tax laws, introduced the measure Tuesday.

Reps. Richard Neal (D-Massachusetts) and Kevin Brady (R-Texas) want younger workers to focus on paying off their student loans instead of contributing to their work retirement plans.

And they want employers to keep matching contributions -- while workers pay off their loans. They also are pushing companies that offer 401(k) plans to automatically enroll all employees.

“The idea is that employees who are overwhelmed with student debt may not realistically be able to save for retirement, and thus are missing out on available matching contributions,” states the summary of the bill, Securing a Strong Retirement Act of 2020.

But Neal and Brady didn't forget about seniors. They want to raise the manadatory age for when older savers have to start drawing on their retirement accounts -- to 75 from 72.

And they want to allow individuals who are at least 60 to save more for retirement in tax-favored accounts.

The U.S. Government Accountability Office said last year that nearly half of people age 55 or older have nothing saved for after they stop working.

Three other things the bill would do: make it easier for savers to make charitable donations from their individual retirement accounts; increase a tax credit for low-income individuals; and extend flexibility for military spouses who are saving for retirement.

The support of both Neal and Brady means the prospects are good for Congress to sign off on the bill -- probably early next year -- regardless of whether Joe Biden or President Trump becomes president or whether the Democrats lose the House or the Republicans lose the Senate.