Senators Richard Burr (R-N.C.) and Michael Bennet (D-Colo.) recently introduced S.2495, the Kathryn Manginelli Act (or the Compassionate Retirement Act), legislation that allows families battling devastating diseases to withdraw their retirement savings without incurring a penalty. ATR supports this legislation and urges its passage.
Under current law, the disability exception allows the disabled to withdraw their retirement savings early without penalty if they are unable to work.
However, the exception does not cover Americans diagnosed with degenerative illnesses that continue working in the months prior to becoming fully disabled. Many Americans diagnosed with terminal diseases choose to work as much as possible during this period in order to allay future medical bills.
S.2495 expands the disability exception to cover American workers diagnosed with degenerative diseases. If implemented, terminally-ill workers would be allowed to withdraw their retirement savings without incurring a 10 percent penalty.
This change would provide much-needed financial stability to families affected by these diagnoses without raising taxes. The government should not tax Americans diagnosed with degenerative diseases for using their retirement contributions to defray medical costs.
S.2495 is a bipartisan piece of legislation that fixes this problem. Congress should pass it, and President Trump should sign it into law.