New Roth IRA Bill Could Help Reduce Fees and Streamline Savings

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The U.S. Capitol building in Washington, D.C.
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A new bipartisan bill in Congress would allow Americans to roll over their Roth IRAs into Roth accounts that are part of workplace retirement plans, such as Roth 401(k)s.

While retirement savers can transfer their workplace accounts to Roth IRAs, the inverse can’t be done under current law.

U.S. Reps. Darin LaHood (R-Ill.) and Linda T. Sanchez (D-Calif.) introduced the bill (HR 6757) in the House of Representatives in December 2023. It was then referred to the House Committee on Ways and Means.

The representatives explain in a joint statement that the bill would help savers consolidate their accounts and reduce fees across accounts.

“Nearly 7 million Americans use Roth IRA accounts to save for retirement. As that number continues to grow rapidly across the country, we must ensure workers can roll their savings into designated Roth accounts within a workplace-based retirement plan,” says Sanchez.

HR 6757 builds on a bill that LaHood and Sanchez previously championed, the Starter-K Act. That measure enables small businesses without retirement plans to offer “starter” 401(k)s, which have the same contribution limits as IRAs, and automatically enroll employees.

The Starter-K Act didn’t become law on its own, but it was folded into and became law as part of the larger Secure 2.0 Act of 2022.

HR 6757 is a comparatively small bill. So it’s possible it could be tacked on to another larger piece of legislation like the Start-K Act was. It’s also possible HR 6757 won’t go anywhere. Most bills (90%) don’t come out of committee.

If the House Ways and Committee does pass the bill, it will still have a ways to go. Before it could become law, the full House would have to pass it, the Senate would have to pass it in identical form, and the president would have to sign it.

It’s a long and arduous process. So, despite the bill’s immediate public support from figures like American Retirement Association CEO Brian Graff, it’ll take some time to see how HR 6757 progresses.

In the meantime, if you want to let your congressional representatives know how you feel about HR 6757, contact them.

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