Tag: 401k
The biggest problem with 401(k) plans is that people do not have enough money in them. Typical estimates of the median balances for people approaching retirement are under $100,000. The second biggest problem is that people have no idea how to draw down their $100,000. Unlike traditional defined benefit plans that provide participants with steady…
The brief’s key findings are: The tax deferral for 401(k) plans costs the Treasury about $50-70 billion per year. Calculating the cost requires comparing how much individuals would pay in taxes on savings within a 401(k) to how much they would pay outside a 401(k). Recent deficit reduction proposals would lower 401(k) contribution caps, which would reduc…
