OKLAHOMA CITY (KFOR) – A United States senator from Oklahoma is proposing a measure that he says would help American families who are struggling due to emergencies.
On Tuesday, Sen. James Lankford unveiled the Enhancing Emergency and Retirement Savings Act of 2021 to help families save for retirement and prepare for emergencies.
The legislation would provide a penalty-free “emergency distribution” option from employer-sponsored retirement accounts and IRAs. One emergency distribution would be permitted per calendar year, and that distribution would be limited to vested amounts over $1,000, with an annual maximum withdrawal of $1,000.
Additionally, the legislation requires that the individual replenish the withdrawn amount back to the plan before an additional emergency distribution from that same plan is allowed.
“I’ve heard from Oklahomans who experience sudden, unexpected emergencies and need a little flexibility to quickly access their own money. I’ve also heard from Oklahoma employers who offer retirement plans and have employees who don’t participate because they don’t have enough money to save for retirement and build up their savings,” said Lankford. “So many Oklahomans live paycheck to paycheck. They want to start saving for retirement, but they can’t take the risk of losing access to their money in case of an emergency. Our commonsense bill provides Americans the flexibility to save for retirement now, knowing they have access to some of their money for an emergency, and be able to pay that money back into their retirement plan. Adding that flexibility will help encourage workers, who might not otherwise feel comfortable participating in their personal or companies’ retirement savings program, to put money in those accounts with a little more peace of mind. I appreciate the partnership of Senator Bennet, Nationwide, and other supporters as we move this idea forward.”
“Nearly four in ten Americans can’t afford a $400 emergency expense. I hear all the time from Coloradans who get hit with an unexpected car repair they can’t afford and then lose their job because they can’t make it to work. Millions of families are trapped in this cycle of economic insecurity—one emergency away from everything falling apart,” said Sen. Michael Bennet, (D-CO.) “This bipartisan legislation will help give workers more flexibility to foot the bill for an unexpected emergency expense.”