To amend the Internal Revenue Code of 1986 to allow distributions from individual retirement accounts to be used without penalty to purchase a first home, to pay for higher education expenses, to pay for certain medical costs of catastrophic illnesses, or to meet expenses during periods of unemployment, and for other purposes.

Amends the Internal Revenue Code to allow penalty-free distributions from eligible individual retirement plans for: (1) qualified first-time home purchases; (2) qualified higher education expenses; (3) a period of involuntary unemployment; and (4) certain medical expenses. Increases the income limitation on the deduction for retirement savings. Provides a cost-of-living adjustment for the maximum allowable contribution.