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Washington,
D.C.
-
U.S.
Senators
Tim
Scott
(R-S.C.),
Elizabeth
Warren
(D-Mass.),
Mike
Lee
(R-Utah),
and
Ron
Wyden
(D-Ore.),
today
introduced
the
Graduate
Student
Savings
Act
of
2017,
which
would
allow
funds
from
a
graduate
student's
stipend
or
fellowship
to
be
deposited
into
an
Individual
Retirement
Account
(IRA).
While
fellowship
or
stipend
funding
currently
is
taxed
as
income
by
federal
and
state
governments,
it
does
not
qualify
as
"compensation"
and
so
cannot
be
saved
in
an
IRA.
"Encouraging
both
educational
progress
and
retirement
savings
is
a
win-win," said
Senator
Scott. "I'm
glad
to
join
a
bipartisan
group
of
Senators
in
this
effort
to
make
a
commonsense
adjustment
to
our
tax
code."
"Saving
for
retirement
is
tough
enough,
but
it's
even
more
difficult
for
graduate
students
and
postdoctoral
fellows
who
can't
designate
a
portion
of
their
earnings
to
tax-deferred
accounts,"
said
Senator
Warren.
"This
bipartisan
bill
opens
a
door
for
students
who
want
to
do
the
right
thing
and
start
saving
early
for
their
futures."
"The
complexity
of
our
tax
code
and
the
incentives
to
save
for
retirement
have
unfortunately
left
many
post-graduate
researchers
in
a
position
where
they
are
unable
to
take
advantage
of
tax-deferred
retirement
savings
programs
like
IRAs,"
said
Senator
Lee. "This
bill
makes
a
very
simple
change
to
the
code
to
fix
this
inequity."
"Our
students
should
not
be
forced
to
choose
between
pursuing
higher
education
and
saving
for
retirement,"
Senator
Wyden
said.
"By
restricting
the
use
of
graduate
and
fellowship
stipends
for
retirement
accounts,
we
are
forcing
our
students
to
make
this
difficult
choice.
This
bipartisan
bill
takes
a
necessary
step
towards
helping
students
achieve
their
academic
goals
while
giving
them
the
opportunity
to
invest
in
their
future."
A
majority
of
doctoral
students
report
receiving
some
of
their
financial
support
during
graduate
school
from
fellowships
or
grants,
and
about
a
third
of
all
students
report
that
fellowships
or
grants
were
their
primary
source
of
funding.
The
median
doctoral
student
takes
about
seven
years
to
finish
a
degree
-
meaning
that,
for
the
better
part
of
a
decade,
a
student
can
be
prohibited
from
saving
portions
of
her
income
in
a
tax-advantaged
account.
This
bill
would
remove
this
unnecessary
hurdle
so
that
students
and
postdoctoral
fellows
can
start
saving
today.
The
Graduate
Student
Savings
Act
of
2017
is
supported
by
Fidelity
Investments;
the
International
Union,
United
Automobile,
Aerospace,
&
Agricultural
Implement
Workers
of
America
(UAW),
Service
Employees
International
Union
(SEIU);
National
Association
of
Graduate-Professional
Students
(NAGPS);
TIAA;
Betterment;
and
American
Federation
of
Teachers
(AFT).
"Many
graduate
students
receive
stipend
or
fellowship
support
that
helps
them
pay
for
food,
rent,
transportation,
or
other
living
expenses
while
in
school.
Although
this
compensation
is
taxed
as
regular
income,
they
do
not
have
the
option
to
save
it
in
an
IRA,"
said
Kevin
Hevert,
Fidelity
Investments
Senior
Vice
President
for
Retirement
Policy.
"All
Americans
should
have
access
to
tools
that
can
help
them
save
for
retirement.
People
are
living
longer
yet
often
have
fewer
sources
of
lifetime
income,
so
the
earlier
they
can
place
some
money
in
an
IRA,
the
bigger
the
impact
down
the
road."
"Saving
early
helps
to
establish
a
lasting
retirement
savings
habit,
leading
to
greater
lifelong
financial
security,"
said
Roger
W.
Ferguson,
Jr.,
president
and
CEO
of
TIAA,
a
global,
diversified
financial
services
firm
and
leading
provider
for
those
in
the
academic,
research,
medical
and
cultural
fields.
"We
applaud
today's
introduction
of
the
Graduate
Student
Savings
Act,
and
urge
lawmakers
to
support
graduate
students
as
they
seek
to
invest
in
their
futures."
"Saving
for
retirement
is
not
an
easy
task,
and
the
current
restrictions
for
graduate
students
make
it
even
harder,"
said
Jon
Stein,
Founder
and
CEO
of
Betterment,
the
largest
independent
robo-advisor.
"The
Graduate
Student
Savings
Act
of
2017
is
changing
this,
making
it
easier
for
more
people
to
save
as
early
as
possible.
We're
proud
to
support
it
and
view
it
as
another
positive
step
toward
improving
retirement
outcomes."
The
legislation
was
originally
introduced
in
2016
by
Senators
Warren
and
Lee,
along
with
a
companion
bill
introduced
in
the
House
by
Congressmen
Joe
Kennedy
(D-Mass.)
and
Luke
Messer
(R-Ind.).
A
fact
sheet
about
the
legislation
is
available
here,
and
the
full
text
of
the
bill
is
available
here.
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