Bill Lynch Proposes Emergency Access to Retirement Accounts
Tuesday, August 17, 2010
Congressional candidate Bill Lynch is urging Congress to pass a law that would allow families to access up to 20 percent of the money in their retirement accounts—without facing penalties or taxes.
Lynch said the law would help cash-strapped families weather the recession.
“Day-to-day cash flow is still the most significant issue facing Rhode Island families,” said Lynch. “While we struggle with this economic crisis and Rhode Island’s unemployment level remains one of the highest in the nation, it is essential that Congress take critical steps so individuals can access their own money to provide for themselves and their families.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTUnder current law, taking money out of a 401(k) before retirement usually results in taxes and penalties that wipe out about 50 percent of the money withdrawn, according to the Lynch campaign.
Lynch would eliminate those penalties and tax private retirement account withdrawals at capital gains rates instead of income tax rates. His proposed law also would phase out the exemption, once the economy has recovered.
“It is unfair to further punish struggling families facing foreclosure and financial ruin by taxing and penalizing withdrawals of their money from the accounts they have contributed to,” Lynch added. “Americans are not looking for a bailout, but they have earned the money and should be allowed to access it.”
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