UPDATED 11:00 A.M. NOV. 3
The GOP tax reform proposal “…makes no changes to the popular retirement savings options that Americans have today – including 401(k)s and Individual Retirement Accounts, or IRAs.”
A document accompanying the Tax Cuts & Jobs Act goes on to state that “Americans will be able to continue making both traditional, pre-tax contributions and ‘Roth’ contributions in the way that works best for them.”
With that announcement, American workers, plan sponsors and the retirement industry at large looks to be able to heave a huge sigh of relief over changes that had been actively under discussion in recent weeks, notably some kind of cap on the amount that workers would be able to save on a pre-tax basis in their 401(k)s.
These issues – and the potentially damaging aspects to retirement savings as a “pay for” other tax reform changes – have been front and center with both NAPA and the American Retirement Association for nearly a year now. Less than two weeks ago, the ARA issued a set of “Retirement Policy Principles for Tax Reform” emphasizing not only the importance of the nation’s private retirement system, but the dangers inherent in changing current retirement savings incentives for solely for the purpose of raising revenue for other tax objectives.
“This is obviously great news,” said Brian Graff, CEO of the American Retirement Association,” but we need to keep the pressure on because we know that things can change, and we certainly can’t afford to take things for granted.”
Our in-depth follow-up coverage of the GOP tax plan can be found here and here.
