For years, American’s have saved for retirement through employer-sponsored retirement plans (i.e. 401ks) and personal retirement vehicles (i.e. IRAs). The income tax incentives provided are primarily what make these plans so attractive for savers, and until recently there has been little doubt that these benefits will remain.
Recently the thought of reversing some or all of these incentives has been toyed with in White House budget proposals and Congressional bills. These changes, while they would increase tax revenue, would decimate existing and future retirement balances for the average American saver preparing for retirement.
While anything is a possibility, we believe existing tax incentives (that help millions of American’s save for retirement) will remain intact. Just recently, a joint bi-partisan resolution was introduced in the House Committee on Ways and Means to ensure that these benefits are protected. While broad tax reform is certainly needed, midstream change to retirement plans is not.
For more information on the joint resolution: http://tinyurl.com/7h46oke