By a margin of more than 4 to 1, Americans do not want Congress to change the current tax incentives for retirement savings accounts, believing this would impede their ability to prepare for retirement, a new national survey by the Coalition to Protect Retirement reveals.
The research shows widespread support across political parties for maintaining the current tax treatment for retirement savings vehicles, such as 401(k) plans, 403(b) plans and traditional IRAs.
The survey of 1,011 U.S. adults was conducted Oct. 14-16, 2013, by the coalition, which includes the Society for Human Resource Management (SHRM) and associations representing retirement plan sponsors, administrators, services providers and related financial institutions.
And opposition grows when changes are put in the context of raising government revenue. Americans are nearly unanimous in agreeing that “my retirement savings account should be off-limits to Congress” in revenue discussions.
At least 8 in 10 in every political group, across demographic and economic spectrums, agreed. Only 5 percent disagreed. Even when informed of both sides of the debate, Americans remain opposed by nearly 7 to 1.
“With the fiscal year 2013 budget deficit totaling $680 billion and the U.S. national debt at more than $17.1 trillion, tax reform and efforts to lower the deficit are a priority for Congress and the White House,” states a November 2013 position paper from SHRM. “Because of their tax-deferred status, employee benefits such as retirement plans, educational assistance and health care benefits may come under scrutiny.”
“Most Americans believe they are already struggling to save, and tax changes will create confusion and more barriers to save for retirement,” said Kathleen Coulombe, senior associate for government relations at SHRM.
Three-quarters (74 percent) of current tax-deferred savers believe that changes such as ending or limiting the current tax-deferred status of retirement plan contributions would be confusing and harmful, compared with just 8 percent who believe that such changes won’t limit anyone’s ability to save. Current retirement savers are particularly engaged and staunchly opposed to changes.
Moreover, nearly three-quarters of current tax-deferred retirement savers (73 percent) oppose outright any changes to their retirement savings plans, and 95 percent agree that retirement savings accounts should be off-limits to Congress.
Americans seem willing to take their opposition to the ballot box, the survey found. More than two-thirds of respondents (68 percent) say they would be less likely to vote for their member of Congress in the next election if he or she supported these types of changes.
Current users of tax-deferred retirement savings plans are the most likely to consider this issue when voting—76 percent say they would be less likely to vote for their member of Congress if he or she voted to change the current tax-deferral rules on their retirement savings.
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