More On Tax Planningfrom The Advisor's Professional Library
- IRAs: In General Individual Retirement Accounts are highly popular tools for contributing funds that grow on a tax deferred basis. Depending on the type of IRA, the accumulation can be tax free.
- Long Term Care Insurance: Premiums While premiums for qualified long-term-care insurance may be deductible as medical expenses there are exceptions to this general rule. Learn how to avoid unnecessary tax liabilities.
“Save the 401(k)!”
It doesn’t have quite the emotional resonance of “Save the Whales,” but it’s endangered nonetheless, according to one industry trade organization.
The American Society of Pension Professionals and Actuaries on Monday launched the “Save My 401k” campaign to “defend the more than 60 million American workers’ 401(k)s from congressional budget cuts.”
“The single most important factor in determining if a worker is saving for retirement is whether or not there is a plan at work,” said Brian Graff, ASPPA’s executive director and chief executive officer, said in a statement. “Last time Congress took up tax reform in 1986, employees’ 401(k) plans were cut by 70%, resulting in a mass termination of plans.”
The organization describes Save My 401(k) as a grassroots campaign to protect the tax incentives of employer-sponsored retirement plans from what they see as the “threat” of tax reform. The goal is to educate members of Congress and urge them to preserve the 401(k) tax incentives that are the foundation of American worker’s retirement savings.
According to data from the Employee Benefit Research Institute, more than 70% of workers earning from $30,000 to $50,000 participate in their employer 401(k) plans, compared with only 5% who save for retirement without a plan at work. As ASPPA notes, given these plans’ growing importance the savings represent more than 65% of their financial assets.
“We understand Congress needs to reduce the debt and raise revenue but raiding the tax incentives for 401(k) plans will put American workers’ retirement security at risk,” Graff added. “Tens of millions of Americans participate in these retirement plans, and 80% of them earn less than $100,000 per year. This is a battle that American workers simply can’t afford to lose.”
Members of the public, retirement plan professionals, employers and ASPPA members are being asked to contact members of Congress to urge them to preserve the retirement savings tax incentives that encourage employers to offer 401(k) plans and employees to utilize them.