I’m always in favor of encouraging saving for retirement, and one avenue for accomplishing that goal is back on the legislative agenda.

House Ways and Means Committee Chairman Richard E. Neal, D-Massachusetts, along with ranking member Kevin Brady, R-Texas, introduced the Securing a Strong Retirement Act of 2021 in the House of Representatives on May 4. The 146-page bill was referred to the Committee on Ways and Means, where it was “adopted by a voice vote” on May 5. Now, the bill is with the House Committees on Financial Services and Education and Labor.

With bipartisan support, the bill (H.R. 2954) has a good chance of becoming law. As a money management professional with a focus on retirement portfolios, I see some welcome improvements.

Beginning in 2022, all catch-up contributions to qualified retirement plans would be subject to Roth tax treatment (Section 603). That’s a big change, since now, catch-ups can be done on a pre-tax basis or Roth if the plan allows Roths. If a plan offered both, the choice would be up to the participant. Under Section 603 of the bill, it appears that pre-tax catch-ups would no longer be possible. As such, I wonder if they would no longer be excluded from gross income for the employee as they are now in pre-tax plans. If that is the intention, a forced Roth limited to catch-ups would be a small price to pay for a retirement vehicle that is tax-free over a tax-deferred retirement account. The 2021 catch-up limit on 401(k)s is $6,500 for participants age 50 or over.

Catch-up contributions on IRAs would be increased by inflation after 2022 (Section 106). These are the additional $1,000 contributions for age 50 and up that apply above current IRA limits ($6,000 for 2021). That’s a plus.

Under Section 107, there would be an increase of the catch-up from $1,000 to $10,000 for employer plans, but only for people ages 62, 63 and 64. The logic of limiting the catch-up to this age band escapes me. I would like to see the catch-up available for anyone over 50 as long as they are still working.

H.R. 2954 also addresses required minimum distributions (RMDs). As a reminder, the RMD age was changed to 72 from 70 1/2 by the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The SECURE Act also eliminated the age limit on contributions to retirement accounts. Before, you could no longer contribute to an IRA after age 70 1/2. Now, anyone with earned income can contribute, no matter the person’s age.

The new legislation delays the age for starting RMDs to age 75, but only after 2031. Between now and then, there would be two phase-in periods (ages 74 and 73). From my perspective, with longevity increasing, the longer an individual has to grow, not deplete, retirement assets, the better.

Matching contributions by employers are currently pre-tax in nature; they do not affect the employee’s W-2 income. Section 604, “Optional treatment of employer matching contributions as Roth contributions,” would allow sponsors of 401(k) plans the option of making employer match contributions more Rothlike. The advantage to the employee would be the ability to fund a Roth with the match, allowing those monies to grow unfettered from income and capital gains taxes. Seemingly, there would be no W-2 disadvantage to the employee, unless the match would be reportable as W-2 income.

Then, there is an intriguing provision in the bill (Section 109) that has to do with student loans. Employers would pay a match into their 401(k), 403(b) or SIMPLE IRA plans when the employee paid down their student loans. The idea is that this would help employees who can’t afford to participate in their retirement plans due to student loan debt.

At tinyurl.com/34f2svte, you can find the bill. You also can give feedback on this bill using a link on the right-hand side of the page to “Contact Your Member.” If you follow that link, you will find a listing of congressional members that you can contact to express your views.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

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Did you know that the Internal Revenue Service (IRS) wants to know your views about taxes, rules, forms, publications and, in my words, “possible frustrations”? Your comments can potentially influence policy for 2021-2022.

The mechanism is the Priority Guidance Plan (PGP), which is run by the Treasury Department's Office of Tax Policy and the IRS. The timing is now, as the comment deadline is May 28.

The PGP helps “identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance,” according to IRS Notice 2021-28 (tinyurl.com/udajenhb).

The public is invited -- even encouraged -- to be a part of the process. If you have an interest in communicating, I would recommend that you visit Regulations.gov to read other comments first, to get a sense of how to present. Go to tinyurl.com/uj36je4c and search comments.

For example, you’ll find a letter from an individual taxpayer pointing out “significant confusion” about how inherited IRAs are to be handled under new laws that went into effect for deaths occurring after 2019. Another comment letter is about student loans.

As someone who has served on the Taxpayer Advocacy Panel (TAP) for three years representing the state of Connecticut, from my own experience, I can attest to the fact that the IRS does want feedback from the public.

I encourage you to take the time to offer your views by the May 28 deadline. Probably the best way to organize your comments is to state the problem, show an example and suggest a possible fix.

You’ll be able to read your own comment letter online after you post it, but you won’t get a response. The IRS does not acknowledge comments, according to an IRS spokesperson.

Getting back to experience with the TAP, you may be interested in doing the same. The TAP is a federal advisory committee to the IRS made up of approximately 75 citizen volunteers. The TAP reports to the secretary of the Treasury, the commissioner of the IRS and the National Taxpayer Advocate.

The volunteer members of TAP make recommendations to improve IRS service. The TAP “listens to taxpayers, identifies major taxpayer concerns and makes recommendations for improving IRS service and customer satisfaction.”

The TAP is seeking members in the following locations: Arkansas, California, Connecticut, Delaware, Georgia, Idaho, international, Kentucky, Massachusetts, Michigan, Missouri, Minnesota, Montana, North Dakota, Nebraska, New Mexico, New York, Oklahoma, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Wisconsin and West Virginia.

The panel is also seeking alternates in the following locations: Alabama, California, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Kentucky, Massachusetts, Michigan, Missouri, North Dakota, Nebraska, New Hampshire, New Mexico, Nevada, Ohio, Oregon, Rhode Island, Texas, Vermont, Wisconsin, West Virginia and Wyoming.

According to an IRS news release (tinyurl.com/3u7wxjdb): “To be a member of the TAP, a person must be a U.S. citizen, be current with his or her federal tax obligations, be able to commit 200 to 300 volunteer hours during the year and pass a Federal Bureau of Investigation criminal background check.”

The deadline to apply for this recruiting season is May 14. You can contact the TAP through its website (tinyurl.com/2u9p82z8) or at 888-912-1227. To watch a video about TAP recruitment, go here: tinyurl.com/3dnwrfnk.

When I served my three-year term with the TAP, I found the experience not only educational, but also very rewarding. It’s a big commitment and a worthy cause. For anyone who wants to make a difference on behalf of taxpayers, I highly recommend throwing your hat into the ring, now, or in the future.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

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Are you talking with your children about money as often as once a week or more? That seems to be a new trend, according to the “13th Annual Parents, Kids and Money Survey” released last week by T. Rowe Price (tinyurl.com/9xj2k4v4). Close to 50% of parents surveyed had money conversations with their children once a week or more, up from 22% in 2020.

The survey, which focused on how the pandemic impacted the financial well-being of families, asked questions of both parents and their children.

Being an advocate of financial literacy for all age levels, I find this to be a promising trend. After all, few schools offer financial programs.

As a 2020 “Survey of the States” by the Council for Economic Education (tinyurl.com/yj88bhrx) reported, only 21 states required high school students to take a course in personal finance, and just 25 states required high school students to take a course in economics. That’s an improvement over years past, but hardly enough.

Financial experts who study financial literacy agree that parents (and grandparents) have an impact.

“Our research shows that kids who have had frequent money conversations with their parents are better positioned for financial responsibility in adulthood,” said Jerome Clark, strategic program manager in T. Rowe Price’s Multi-Asset Division.

That’s enough of a reason to seriously consider initiating talks about finances with children of all ages. However, based on decades of experience working with families, I wouldn’t recommend money discussions at mealtime.

In the survey of more than 2,000 parents and their 8- to 14-year-olds, it turned out that COVID-19 was a factor in driving the frequency of conversations about money -- and the subject matter.

The pandemic impacted most of those surveyed (80%), mostly in a negative way (67%). For example, about one out of three families were saving less for retirement, and 35% were dipping into retirement savings to pay for living expenses. Almost one of three families decreased savings for college, and 35% were saving less for other goals. One of two (57%) families reported they had credit card debt, up from 43% in 2020.

Meanwhile, you can assume that the kids are observing their parents and learning. What are they picking up?

In my personal experience of working with families, I can share that kids are sponges. They can be learning lessons about credit or household finances. Or those lessons can be about how to solve money problems. Or both.

From my perspective, it is important for parents to keep in mind that children also pick up on their parents’ emotional state. One out of two kids reported that their parents were more stressed. Some kids had their allowances reduced.

As Clark noted, “Kids often pick up on unspoken cues, and stressful situations can be turned into powerful teaching tools.”

The important thing in this case is to deliberately teach these monetary lessons rather than run the risk of children picking up on financial stress and coming to their own conclusions.

To help with the dialogue, check out T. Rowe Price’s “Money Confident Kids” website (tinyurl.com/esxrz4y5), which features a number of learning tools, including a section on conversation starters. Also see the Consumer Financial Protection Bureau’s “Money as You Grow” page (tinyurl.com/66w9ntvk), and the “Youth & Money” section (tinyurl.com/cdjxvc25) on the website of the American Bankers Association.

It’s important to be involved in helping your children (and grandchildren) learn about financial literacy and handling money, and hopefully guide them toward sound financial habits that will last them a lifetime.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers Inc. of Stamford, Connecticut) and award-winning author, welcomes your questions/comments (readers@juliejason.com). Please visit www.juliejason.com.

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