A bipartisan commission has released a report with recommendations on how more Americans can be made secure in retirement. If the proposals are enacted, the wealthiest people in the country could have larger tax bills.
It is not a secret that millions of Americans do not have enough savings to retire comfortably when they want. This leaves many elderly people in the workforce and often competing for scarce jobs with younger generations. It has the potential to create a drag on the amount younger workers can earn, which then makes it more likely they will not have enough savings for retirement.
It also means that the people without savings will not be able to leave inheritances for their children.
Figuring out how to fix these problems has not been easy. Bloomberg reports that a bipartisan commission has released some ideas in "High Earners Are Going to Hate These Retirement Proposals."
Some of the ideas include:
- Limit mortgage interest tax deductions to encourage people to borrow less against the equity in their homes.
- Increase the Social Security tax income cap, raise payroll taxes and put a cap on Social Security spousal benefits.
- Limit the amount of assets that can be held in retirement plans that receive tax advantages.
- Do not allow non-spousal beneficiaries of retirement accounts to keep assets in the account for longer than five years.
These proposals are recommendations only and are not pending legislation.
Reference: Bloomberg (June 9, 2016) "High Earners Are Going to Hate These Retirement Proposals."