Savings and Retirement Income Incentive Act of 1981

Savings and Retirement Income Incentive Act of 1981 - Amends the Crude Oil Windfall Profit Tax Act of 1980 to make permanent the income tax exclusion for dividend and interest income. Increases such tax exclusion for persons over age 65 to $500 ($1,000 for joint returns).

Amends the Internal Revenue Code to increase to $2,000 the amount of the income tax deduction for contributions to individual retirement accounts. Eliminates the prohibition against certain pension plan participants (e.g. government and military personnel) from making deductible contributions to individual retirement accounts. Increases the amount of nondeductible contributions which an individual may make to an individual retirement account in a taxable year and over such individual's lifetime.

Permits contributors to an individual retirement account to withdraw from such an account up to $10,000, without tax penalty, in order to purchase a first home or finance the higher education of a dependent child.

Allows an income tax deduction for voluntary employee contributions to tax-qualified employer pension and annuity plans.