Trump says ‘NO change’ to 401(k) plans in GOP tax reform plan

Trump says ‘NO change’ to 401(k) plans in GOP tax reform plan
President Donald Trump said on Twitter Monday there will be no changes to 401(k) plans. (Saul Loeb AFP/Getty Images)

President Donald Trump tweeted on Monday there will be no changes to Americans’ 401(k) plans. The tweet comes amid rumors that Republicans are considering slashing the amount workers can contribute to their traditional pre-tax plans.

What’s the story?

Some reports over the weekend claimed that some Republicans are considering a proposal that would cap employees’ tax-deferred contributions significantly. Rumors have circulated for months, according to the New York Times, that allege “negotiators were debating the cap as a way to offset the revenue loss from a reduction in business tax rates that Republicans have put at the center of their plan.”

Such a change might also discourage some workers from saving for retirement, Fox News reported.

How much can workers contribute to traditional 401(k) plans?

● Up to $18,000 a year for pre-tax contributions for workers under the age of 50, according to the IRS’ website.
● Workers 50 and older can contribute up to $24,000.

What’s the rumored proposal?

● That the annual amount workers would be allowed to contribute may be capped to as low as $2,400.

What did Trump’s tweet say?

“There will be NO change to your 401(k). This has always been a great and popular middle class tax break that works, and it stays!”

What is in the GOP tax reform plan?

● Cut taxes for working families.
● Simplify the tax code
● Reduce business tax rates

Republican lawmakers released last month the framework for the reform plan. The actual plan has not yet been released.

House Republicans will be working to pass a budget this week so they can turn their attention to tax reform, ABC News reported.

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