Whether it's shady politics or just bad math, proposals to curb retirement plan tax incentives are not only detrimental for low-income savers, they're based on inflated calculations, experts said this week.
Lawmakers are eying tax-deferred retirement savings as a way to tackle the deficit. They've labeled 401(k) incentives as regressive tax expenditures that need to be reduced (which sounds better than proposing tax increases). By stifling the tax breaks on these plans, Congressional leaders hope to recoup some of the $600 billion in lost tax revenue over the next five years.
As tax-deferred retirement savings are one of three top "tax expenditures" in the U.S., it's no wonder the feds are targeting it. But economists at ASPPA say the forecasted savings from scaling back 401(k) tax incentives is not just a little exaggerated, it's inflated by almost 75 percent due to faulty analysis.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
