Should We Get Rid of Tax Deductions on 401(K) Contributions?

If you’re planning on continuing to contribute to your 401(k), then you might want to listen to this episode!

As you know, 401(k)s are tax-deductible, which makes them a very attractive type of retirement asset for future retirees everywhere.

However, lately, two economists have been arguing that the US government should abolish tax breaks for 401(k) and IRA contributions.

Why?

Because – as per these economists – they disproportionately benefit the wealthy and do little to increase overall savings rates. They suggest that instead, the funds could better support Social Security.

Very obviously, this proposal was quite controversial and has sparked debate all around the country, with some in the financial industry defending the tax-favored plans as crucial for middle-class retirement savings, and others suggesting reforms to make the benefits more equitable.

This episode, we give you our take on this whole ordeal.

Want to learn more?

Then tune in now!

Key Takeaways:

Introduction (00:00)

Should we get rid of tax deductions on 401(k)s? (01:42)

A more controversial idea (07:00)

Let’s speculate a bit (11:33)

The issue of retirement preparedness (17:00)

Additional Resources:

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Retire With Confidence is a podcast that teaches listeners the best strategies to plan their retirement for a happy and financially secure future. Listen now and learn how to plan for your golden years. Follow us for more!