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Could Rothification Be Resurrected?

The U.S. Senate is expected to unveil its tax reform package today — could Rothification resurface?

It seems (highly) unlikely, but a group of 15 Senate Democrats (and one independent who caucuses with the Democrats) has written to Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR), urging the committee to “protect existing tax incentives that promote retirement savings” and cautioning that “changes to the existing system, particularly so-called ‘Rothification’ … threaten the ability of the middle class to save for retirement” and calling such a change “unacceptable.”

The letter cites a recent report by Pew Charitable Trusts that claims that 73% of eligible workers making between $25,000 and $49,999 participate in an employer-sponsored retirement plan, when such a plan is offered. Additionally, they cite the recent report from the nonpartisan Employee Benefit Research Institute (EBRI) which found that, regardless of income level, participating workers making $10,000 per year or more contribute an average of at least $2,700 to their accounts.

“We urge you to reject any legislation that would harm the incentives on which Americans rely today to save for retirement,” the letter closes.