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Americans Agree: Keep Current Tax Incentives for Retirement Savings
As Congress considers tax and budget reforms in the coming weeks and months, a study by the Investment Company Institute (ICI) shows that U.S. households strongly believe lawmakers should maintain current tax incentives for retirement savings.
The study, America’s Commitment to Retirement Security: Investor Attitudes and Actions, 2013, finds that 85 percent of the 4,000 households surveyed disagreed with the statement, “The government should take away the tax advantages of defined contribution (DC) accounts,” such as 401(k)s.
- Current tax incentives encourage individuals to save for retirement. For example, more than 80 percent of DC-owning households said that the immediate tax savings from their retirement plans were a big incentive to contribute.
- DC plans make it easier for people to save. Indeed, about nine out of 10 households with DC accounts agreed that these plans helped them think about the long term and made it easier to save.
- U.S. households are generally confident that DC plans can help individuals meet their retirement goals. In fact, nearly eight out of 10 households that own either DC accounts or individual retirement accounts (IRAs) were confident that such accounts can help people achieve their retirement goals.
Even though the country faces fiscal pressures, Americans recognize the importance of maintaining the tax incentives for retirement savings.
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The Investment Company Institute is the voice of registered funds and their investors. Members of ICI manage total assets of $14.6 trillion and serve more than 90 million shareholders. In addition, members manage about half of the assets in DC and IRA accounts.