Should the Government Get Rid of 401(k) Accounts? How You Should Prepare in Case These Economists Get Their Way
Two high-profile economists recently stirred up controversy by recommending that the IRS eliminate tax-deferred contributions to 401(k) accounts. Sweeping changes are unlikely to happen anytime soon, and your nest egg isn't in jeopardy of going away, so don't panic about the headlines. Still, it's important to understand the challenges and potential solutions that policymakers are facing as it pertains to retirement planning right now. That way you can build a rock-solid retirement plan that can thrive, regardless of future regulations.
The American Enterprise Institute (AEI) published an article in January in which two economists made a case for eliminating the tax preferences on 401(k) contributions. This suggestion ruffled some feathers -- these are among the most popular retirement savings tools, and Americans have around $7 trillion packed away in these accounts. The paper sparked discourse about the issues at hand and the best ways to fix them.
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