Hoping to retire? Politicians at work debating fine print
U.S. retirement programs could look different if a grand deficit-cutting bargain is struck in upcoming negotiations.
Tomorrow, the powerful Senate Finance Committee will explore “Tax Reform Options: Promoting Retirement Security.” Among the ideas being floated are a replacement of the 401(k) deduction, changes in the withdrawal choices that workers face when they retire and a shift in the way Social Security benefits are calculated. That is on top of the increase in the retirement age that has been mentioned several times in recent months.
A variety of pressures and trends have come together to put these new ideas on the table. Prominent members of both political parties have talked up the idea of loophole-closing, rate-lowering tax reform.
Put all of it together, and it points to changes in the sprawling retirement system. “The kinds of points at which you can get fundamental changes adopted is in the midst of a big deal,” says Dallas Salisbury, who has been watching retirement policy closely as head of the Employee Benefit Research Institute. “And President Obama wants a grand bargain.”