A pair of U.S. representatives are pushing legislation that would be a huge benefit to anyone accessing one of the country’s most popular retirement accounts.
The bipartisan legislation led by Darin LaHood (R-IL) and Linda T. Sanchez (D-CA) would allow for Americans to move their Roth IRA savings into their workplace Roth account. These are the Roth 401(k), Roth 403(b), or Roth 457(b).
The end goal of allowing for the combining of the two accounts is to remove the chances of wrongful additional fees and the difficulty of managing multiple accounts.
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“Our bipartisan bill will allow for the consolidation of assets, reduce the potential for duplicative fees, and bolster retirement savings for families across the country,” LaHood said in a statement.
Sanchez said that the law would benefit the “nearly 7 million Americans” who use Roth IRA accounts for retirement.
Roth IRAs are a popular retirement account where individuals can invest after-tax funds of up to $7,000. The limit actually goes up to $8,000 for individuals 50-years-old and above.
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The fund can be used to invest in the stock market for money to grow over time, and unlike a traditional 401k, money is taxed immediately upon depositing to the account which could benefit those at an early age who are in lower income tax brackets.
This law protects Americans who have to manage multiple accounts — which could come from changing employers or creating a separate Roth IRA from their workplace — from falling into unnecessary fees or losing track of their investments.
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