Congress Introduces Bipartisan Bills to Boost Retirement Savings for Family Caregivers
New bipartisan legislation in Congress would allow family caregivers to contribute to retirement accounts even when they are not earning income. The bills target a gap in the tax code that leaves millions of unpaid caregivers, mostly women, without retirement savings.
A pair of bipartisan bills introduced in Congress this month would allow family caregivers to contribute to retirement savings accounts even when they are not earning a paycheck.
Current tax law requires earned income to contribute to an IRA or similar retirement account. That rule effectively shuts out millions of Americans who leave the workforce to care for children, aging parents, or disabled family members. Most of those caregivers are women.
The proposed legislation would create a "caregiver IRA" that allows contributions based on the income of a working spouse or partner. Supporters say the change would help close the retirement savings gap between men and women, which is driven in part by career interruptions for caregiving.
Sen. Patty Murray, one of the bill's co-sponsors, said the current system penalizes people for doing work that society depends on. "Caregiving is work," Murray said. "It should not cost you your retirement."
The bills have support from both Republican and Democratic lawmakers, which advocates say improves their chances of passing. Similar proposals have been introduced in previous sessions of Congress but did not advance.
The legislation comes as Americans are increasingly worried about retirement security. A recent survey found that more than half of workers over 50 say they are behind on retirement savings. Women are disproportionately affected, with average retirement savings roughly 30 percent lower than men's.
Financial planners say the caregiver IRA would be most valuable for people who take extended breaks from work. Even modest annual contributions, compounded over decades, can make a significant difference in retirement income.
The bills have been referred to the Senate Finance Committee and the House Ways and Means Committee. No vote has been scheduled.
