It is no secret that our countries federal deficit is quite steep, but is retirement savings the correct place to look for money to reduce this problem?
Currently, Congress is strongly considering removing all or part of the tax incentives, including pre-tax contributions, for 401(k) plans. This is viewed as a method to increase federal tax income, based on the current budget scoring system.
The last time Congress considered tax reform in 1986 it cut the 401(k) contribution limit by 70%, which had a devastating impact on the ability of American workers to save for retirement.
Brian Graff, Executive Director and CEO of the American Society of Pension Professionals & Actuaries explains that this search for funding is “a lust for revenue.” The main worry is that retirement is already tough enough to plan for and that the governments plan for tax reform to existing 401(k) plans will only make this process more difficult for Americans. As negotiations continue in Washington, there is a strong urge for the general public to make their voices heard and take action to prevent this from happening again.