Topic: Retirement Plans

How to Pay Zero Taxes on Income of Millions of Dollars

By :: June 24th, 2015

Remember when people complained that hedge fund managers and private equity firm owners paid a lower tax rate than many workers? Or when Warren Buffett said he shouldn’t pay a lower rate than his secretary?  In those cases, investors were benefiting from low capital gains rates, but at least they paid some tax. Now, thanks […]

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A New Way to Invest for Old Age, But How Many Will Buy?

By :: August 1st, 2014

A few weeks ago, with absolutely no fanfare, the Treasury Department announced what could be a major change in the way we save for retirement. It will now permit people to shift a portion of their 401(k)s or IRAs into a deferred annuity that provides a guaranteed stream of income once you reach old age. […]

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Making Saving Incentives More Equitable

By :: July 8th, 2014

Tax expenditures for retirement saving top $100 billion annually—from 401(k)-type plans ($61.4 billion) to IRAs ($17.6 billion) to tax preferences for pensions ($35.1 billion)—but these subsidies disproportionately benefit higher-income households and do relatively little to improve the balance sheets of low- and moderate-income Americans. According to one study, the bottom 40 percent of households received […]

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State of the Union Speech Promotes New Retirement Savings Vehicles

By :: January 30th, 2014

In this year’s State of the Union Address, President Obama announced a new retirement savings account for workers whose employers do not offer any form of pension or savings plan. He also promoted the Automatic IRA, a retirement savings plan that originated at the Retirement Security Project and has been in the Administration’s budget for […]

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The Center for American Progress Rethinks Retirement Savings

By :: August 22nd, 2013

Kudos to Rowland Davis and David Madland at the Center for American Progress for rethinking retirement savings. In a paper with the rather understated title “American Retirement Savings Could Be Much Better,” the authors attempt to stitch together the best of defined contribution plans and defined benefit pensions. Their preferred vehicle is what’s known as a […]

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Automatic Retirement Saving Inches Forward

By :: March 22nd, 2013

Automatic enrollment is slowly gaining steam as the choice strategy to encourage retirement saving.  A bold plan in California would eventually make the practice widespread and could revolutionize the state’s saving landscape. Last September, the California legislature approved a framework for automatically enrolling private-sector workers in a retirement savings plan.  Employers with more than five […]

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Do Mandates or Tax Subsidies Do a Better Job of Boosting Savings?

By :: September 4th, 2012

Most policymakers and economists agree that Americans don’t save enough. But which government policy does a better job encouraging saving and investment: tax subsidies such as 401(k)s, or mandatory savings systems such as traditional defined benefit pensions or auto-enrollment defined contribution accounts? An important new study finds that if the goal is boosting total savings–as opposed […]

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President’s 2013 Budget Would Enable Almost All Americans to Save for Retirement

By :: February 16th, 2012

The new 2013 budget unveiled by President Obama on Monday again contains the Automatic IRA, which was developed by Brookings’ Retirement Security Project in conjunction with The Heritage Foundation. This year’s  version includes an important change that will also encourage more employers to offer a 401(k) account to their workers. However, important changes to the […]

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401(k) Plans May Be a Better Deal for Low Wage Workers Than We Thought

By :: January 10th, 2012

Tax-deferred 401(k) plans may be a better deal for low-income workers than economists thought, according to new research by my Tax Policy Center colleague Eric Toder and Urban Institute senior research associate Karen Smith. While high-income workers may get a bigger tax break from their 401(k)s, they also face a short-term trade-off. That’s because their […]

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Doing the Roth Roll: The Quiet Explosion in IRA Conversions

By :: July 8th, 2010

Back in 2005, Congress gave many high-income savers a great gift, with the proviso that they couldn’t unwrap the package until this year. The bequest allowed the affluent to convert their traditional tax-deferred Individual Retirement Accounts into tax-free Roth IRAs. Now that these lucky investors have torn open the box, we’re beginning to learn what this opportunity will mean both for them and for federal revenues.

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