Senior Citizens' Financial Freedom Act

Summary: Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to repeal the limitation on the amount of outside income which beneficiaries who have attained retirement age may earn (earnings test) without incurring a reduction in benefits.
Amends the IRC to provide for a graduated increase in age from calendar year 2000 to 2014 and thereafter for required distributions from qualified trusts.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Senior Citizens' Financial Freedom 
Act''.

SEC. 2. REPEAL OF INCREASE IN TAX ON SOCIAL SECURITY BENEFITS.

    (a) In General.--Paragraph (2) of section 86(a) of the Internal 
Revenue Code of 1986 (relating to social security and tier 1 railroad 
retirement benefits) is amended by adding at the end the following new 
flush sentence:
        ``This paragraph shall not apply to any taxable year beginning 
        after December 31, 2000.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2000.

SEC. 3. ELIMINATION OF EARNINGS TEST FOR INDIVIDUALS WHO HAVE ATTAINED 
              RETIREMENT AGE.

    (a) In General.--Section 203 of the Social Security Act (42 U.S.C. 
403) is amended--
            (1) in subsection (c)(1), by striking ``the age of 
        seventy'' and inserting ``retirement age (as defined in section 
        216(l))'';
            (2) in paragraphs (1)(A) and (2) of subsection (d), by 
        striking ``the age of seventy'' each place it appears and 
        inserting ``retirement age (as defined in section 216(l))'';
            (3) in subsection (f)(1)(B), by striking ``was age seventy 
        or over'' and inserting ``was at or above retirement age (as 
        defined in section 216(l))'';
            (4) in subsection (f)(3)--
                    (A) by striking ``33\1/3\ percent'' and all that 
                follows through ``any other individual,'' and inserting 
                ``50 percent of such individual's earnings for such 
                year in excess of the product of the exempt amount as 
                determined under paragraph (8),''; and
                    (B) by striking ``age 70'' and inserting 
                ``retirement age (as defined in section 216(l))'';
            (5) in subsection (h)(1)(A), by striking ``age 70'' each 
        place it appears and inserting ``retirement age (as defined in 
        section 216(l))''; and
            (6) in subsection (j)--
                    (A) in the heading, by striking ``Age Seventy'' and 
                inserting ``Retirement Age''; and
                    (B) by striking ``seventy years of age'' and 
                inserting ``having attained retirement age (as defined 
                in section 216(l))''.
    (b) Conforming Amendments Eliminating the Special Exempt Amount for 
Individuals Who Have Attained Retirement Age.--
            (1) Uniform exempt amount.--Section 203(f)(8)(A) of the 
        Social Security Act (42 U.S.C. 403(f)(8)(A)) is amended by 
        striking ``the new exempt amounts (separately stated for 
        individuals described in subparagraph (D) and for other 
        individuals) which are to be applicable'' and inserting ``a new 
        exempt amount which shall be applicable''.
            (2) Conforming amendments.--Section 203(f)(8)(B) of such 
        Act (42 U.S.C. 403(f)(8)(B)) is amended--
                    (A) in the matter preceding clause (i), by striking 
                ``Except'' and all that follows through ``whichever'' 
                and inserting ``The exempt amount which is applicable 
                for each month of a particular taxable year shall be 
                whichever'';
                    (B) in clauses (i) and (ii), by striking 
                ``corresponding'' each place it appears; and
                    (C) in the last sentence, by striking ``an exempt 
                amount'' and inserting ``the exempt amount''.
            (3) Repeal of basis for computation of special exempt 
        amount.--Section 203(f)(8)(D) of such Act (42 U.S.C. (f)(8)(D)) 
        is repealed.
    (c) Additional Conforming Amendments.--
            (1) Elimination of redundant references to retirement 
        age.--Section 203 of the Social Security Act (42 U.S.C. 403) is 
        amended--
                    (A) in subsection (c), in the last sentence, by 
                striking ``nor shall any deduction'' and all that 
follows and inserting ``nor shall any deduction be made under this 
subsection from any widow's or widower's insurance benefit if the 
widow, surviving divorced wife, widower, or surviving divorced husband 
involved became entitled to such benefit prior to attaining age 60.''; 
and
                    (B) in subsection (f)(1), by striking clause (D) 
                and inserting the following: ``(D) for which such 
                individual is entitled to widow's or widower's 
                insurance benefits if such individual became so 
                entitled prior to attaining age 60,''.
            (2) Conforming amendment to provisions for determining 
        amount of increase on account of delayed retirement.--Section 
        202(w)(2)(B)(ii) of such Act (42 U.S.C. 402(w)(2)(B)(ii)) is 
        amended--
                    (A) by striking ``either''; and
                    (B) by striking ``or suffered deductions under 
                section 203(b) or 203(c) in amounts equal to the amount 
                of such benefit''.
            (3) Provisions relating to earnings taken into account in 
        determining substantial gainful activity of blind 
        individuals.--The second sentence of section 223(d)(4)(A) of 
        the Social Security Act (42 U.S.C. 423(d)(4)(A)) is amended by 
        striking ``if section 102 of the Senior Citizens' Right to Work 
        Act of 1996 had not been enacted'' and inserting the following: 
        ``if the amendments to section 203 made by section 102 of the 
        Senior Citizens' Right to Work Act of 1996 and by the Senior 
        Citizens' Financial Freedom Act had not been enacted''.
    (d) Effective Date.--The amendments and repeals made by this 
section shall apply with respect to taxable years ending after December 
31, 2000.

SEC. 4. GRADUAL INCREASE IN AGE FOR REQUIRED MINIMUM DISTRIBUTIONS FROM 
              PENSION PLANS.

    (a) In General.--Section 401(a)(9)(C) of the Internal Revenue Code 
of 1986 (defining required beginning date) is amended--
            (1) by striking ``age 70\1/2\'' and inserting ``the 
        applicable age'', and
            (2) by adding at the end the following new clause:
                            ``(v) Applicable age.--For purposes of this 
                        subparagraph, the applicable age shall be 
                        determined in accordance with the following 
                        table:

                                                             Applicable
``Calendar year:                                                   Age:
    2000..........................................                  71 
    2001..........................................                  72 
    2002..........................................                  73 
    2003..........................................                  74 
    2004..........................................                  75 
    2005..........................................                  76 
    2006..........................................                  77 
    2007..........................................                  78 
    2008..........................................                  79 
    2009..........................................                  80 
    2010..........................................                  81 
    2011..........................................                  82 
    2012..........................................                  83 
    2013..........................................                  84 
    2014 and thereafter...........................                85.''
    (b) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1999.