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  • Writer's pictureSteven J. Rosenthal, CPA, CFP, JD

Threats to Tax-Advantaged Retirement Plans



Although Congress has tweaked the features of tax-advantaged (“qualified”) retirement plans with Secure Act 2.0 legislation, threats to these plans are on the horizon. Policy discussions are taking place that could eliminate new contributions to tax-advantaged 401(K), 403(b), and IRA accounts altogether.


The policy argument for curtailing or eliminating the plans is that they benefit wealthy investors without tax benefits for their retirement. The money the federal government saves from eliminating these tax benefits can be used to shore up the Social Security trust funds, which are projected to be in a deficit position by the early to mid-2030s.


Some commentators have pointed out that these plans still benefit many middle-class wage earners. In addition, the demise of these plans would discourage Americans from saving for retirement, making retirees less financially secure. None of the proposals have suggested eliminating tax benefits from these plans for previous contributions. However, investors should consider maximizing their contributions to qualified retirement plans now to be prepared for the potential that the plans might be reduced or eliminated.


Fulcrum Wealth Advisors can help its clients leverage tax-advantaged plans today to maximize their wealth during their retirement years.


For further reading, see:






 

Investment advisor representative of securities and investment advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer, and Registered Investment Advisor. Cetera is under separate ownership from any other named entity. In addition, some Investment advisory services are offered through Fulcrum Wealth Advisors, LLC. Fulcrum Wealth Advisors, LLC is a registered investment advisor in the State of Washington. 

Branch Address: 10940 NE 33rd PL., # 210 Bellevue, WA 98004     Branch Phone: 877-400-0260
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