Tax Plan Renews Conversation About Retirement Savings - WTRF 7 News Sports Weather - Wheeling Steubenville

Tax Plan Renews Conversation About Retirement Savings

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Prior to House Republicans releasing their tax plan, an idea floated around Washington that would decrease the maximum amount of tax-deferred contributions workers can put in their 401K.

President Donald Trump has promised this will not happen, but other GOP leaders have reportedly said it is not off the table.

According to the Wall Street Journal, the proposal would have capped the annual amount that can be placed into a traditional 401K at $2,400 a year, and any contribution after that would have to go toward a Roth account.

Currently, the cap is $18,000 for people under 50 and $24,000 for those over 50. 

The purpose would be to increase tax revenue, but some financial experts say it would be detrimental when it comes to saving for retirement.

"Most people with their 401Ks now, even if they have a match, don't save enough for retirement, so to put more caveats on it where it makes it even more difficult or not as advantageous discourages that savings We need that savings right now to help supplement Social Security, to make sure people have the money they need. We ought to be encouraging them to do it and giving them more benefits, not taking things away," said Jason Haswell, Managing Director at the Monteverde Group. 

Again, President Trump stated on Twitter that there will be no changes to 401Ks. 

The proposal was not included in the recently released GOP tax plan, but experts say this has renewed the conversation about saving for retirement.

The average household only has about $60,000 in a retirement account.

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