As Congress continues to work to balance the federal budget and eliminate the deficit, a variety of ideas and proposals have been put on the table. Some leaders in Washington have proposed eliminating tax incentives for individual retirement savings, such as in 401k’s, IRAs and other private retirement plans.
The New England Council’s Financial Services Committee, along with other regional leaders in the financial services industry, are concerned about the potentially devastating long term consequences of such a measure. The Council recently wrote to members of the New England Congressional delegation to express its concerns and outline the long-term benefits of encouraging Americans to save for retirement by deferring taxation on retirement savings until the funds are withdrawn years later. Our letter to the delegation stressed that the current tax deferral for savings not only promote individual financial self-sufficiency, but also reduce the burden on our already strained government entitlement systems in the long run. We are also very concerned that if there is less incentive to invest in retirement savings accounts, there would be a significant impact on the financial services industry, which plays a large role in the New England economy.