Ask Roskam: Financial Security


DuPage, IL – October 15, 2008 – (RealEstateRama) — Throughout my first term in Congress I have regularly used conference calls, local town hall meetings and events throughout the district to communicate directly with my constituents.

While these are very effective communication tools, I can’t always get to everyone who wants to ask a question.  Therefore, I will occasionally use this column to specifically answer your questions.  I encourage you to submit any future questions you might have by visiting my web site at

Q: I am concerned about the stability of my local bank.  How do I know if my account is safe?

Congress recently increased the Federal Deposit Insurance Corporation, or FDIC, deposit insurance limits from $100,000 to $250,000.  If your deposits are within the FDIC limits, as is the case for most bank customers, those deposits are safe regardless of the financial condition of your bank. The FDIC covers checking and savings accounts, money market deposit accounts and certificates of deposit (CDs), against any loss up to the federal limits.

To ensure that your accounts are protected you can visit  These new limits are valid through December 31, 2009.

Q: My husband and I don’t have employer-based pensions and are forced to save what little money we have for our nest egg.  What is Congress doing to help people like us prepare for retirement?

More than 77 million Americans plan to begin retiring over the next year, a challenge our nation must prepare for.  The rising costs of living from gas prices to food have placed a heavy burden on family budgets already stretched thin, leaving little to no money to save for retirement. This heavy burden, coupled with the recent volatility in our markets, have many families struggling to adequately prepare their nest egg so it can last throughout the full span of their retirement years. With fewer traditional pension plans, Americans must take an active personal role in saving for their retirement.

In Congress, I have cosponsored legislation to help Americans – especially those without access to any employer-sponsored retirement plan – secure a steady, reliable stream of income for life.  The Retirement Security for Life Act creates a tax incentive for the use of lifetime annuities by excluding from federal taxes half of the income from an individual lifetime annuity, up to an annual limit of $20,000.  This would translate into as much as $5,000 in tax savings for an individual in the 25 percent tax bracket.

Families just like yours have worked all their lives trying to make ends meet and saving up for a retirement nest egg.  It important that we help you turn your hard-earned savings into retirement security in the form of a guaranteed “paycheck for life.”

Q: My wife and I have spent the past 30 years paying down our home’s mortgage and are planning to use the equity for retirement. However, I am reluctant to lose a sizable chunk of our investment to taxes if we sell.  What can Congress do to protect homeowners using their homes as investments?

Since many homeowners rely on the appreciation and equity of their home for financial security, it is economically unwise to take massive amounts of that investment out of the economy in capital gains taxes. Middle-class homeowners in high-cost areas are often handed a tax bill when they sell their homes because the home ownership exemption is still stuck at $250,000 for individuals and $500,000 for a couple. This exemption has not been updated since 1997.

In Congress, I helped introduce the Homeowners’ Exemption Update Act of 2007 which will ensure homeowners are not being pushed into higher tax brackets by doubling the homeownership exemption to $500,000 for an individual and $1 million per couple.

Protecting middle-class families and homeowners will help strengthen our economy, secure homes as wise investments and protect the nest eggs of millions of retiring Americans.

For more information or assistance, feel free to call my District Office at 630-893-9670 or visit my website at


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