Americans overwhelmingly – by a margin of 4 to 1 – oppose changing tax rules for retirement savings accounts, according to a survey by the Coalition to Protect Retirement, a group of America’s leading supporters of retirement savings plans.
The research shows widespread support across political parties for maintaining the current tax treatment for retirement savings vehicles, such as 401(k) plans, 403(b) plans, and traditional IRAs.
According to the survey, which was conducted in mid-October, 87 percent of all Americans and 95 percent of those who have a tax-deferred 401(k)-like retirement plan accounts believe retirement savings should be ‘off limits’ to Congress and not a source of new revenue for the government.
The release of the survey coincides with the Coalition’s launch of a national education and advocacy campaign to preserve the current tax incentives for retirement savings. The campaign will raise awareness about how current tax deferral rules are helping millions of Americans prepare for their own retirement, and will urge workers and their employers to tell Congress not to change or limit these incentives to save.
Visitors to the Coalition’s website www.HowAmericaSaves.com will be able to send letters to their elected officials and follow developments in Congress.
Hank Jackson, president and CEO of the Society for Human Resource Management said: "Retirement savings incentives play an essential role in encouraging Americans to save and employers to sponsor retirement plans. This isn’t just smart tax policy – it’s proven good sense."
Tax Incentives Help Americans Save for Retirement
The current tax incentives have succeeded in helping Americans save for retirement and have increased the number of workers who are covered by retirement plans. According to the latest available data, more than 67 million people participate in private-sector defined contribution plans alone. All told, Americans have US$20.9 trillion in assets earmarked for retirement.
All Income Levels Benefit from Retirement Plan Tax Incentives
Individuals at all income levels have benefitted from these incentives, particularly middle-income earners. More than 70% of American workers who earn between US$30,000 and US$50,000 a year contribute to a retirement savings plan when one is offered at work.
Kenneth E. Bentsen, Jr., president of the Securities Industry and Financial Markets Association, said: "Given the vast numbers of baby boomers who reach retirement age every day, retirement savings incentives are needed more than ever. They are doing what they were intended to do – helping people who need them most to take responsibility for their own retirement security."
The Coalition noted the important role employers play in helping workers prepare for retirement. Between 2000 and 2009, employers contributed almost US$3.5 trillion to public and private retirement plans. Changes to current incentives could adversely affect employer-sponsored plans, contributions, and the retirement security of millions of Americans.
Brian Graff, CEO and executive director of the American Society of Pension Professionals & Actuaries, said: "Raising new revenue should not come at the expense of Americans’ retirement savings, not now or in the future. If Congress reduces the benefits of offering and contributing to retirement savings, fewer people will save. The result: more of tomorrow’s retirees will need to turn to the government for help, and that will mean more federal spending."