Are you concerned about your 401(k)?

There's a little buzz going around the HR blogs about proposed legislation to eliminate 401(k) tax benefits.  I was going to write a post linking to them, but just found that Ann Bares has already neatly summarized them - read her posting here.  Ann and the others urge HR and reward professionals to pay close attention to this legislation. 

I'm urging you - the employee- to pay close attention! With the results of the recent national election, there's significant excitement about the potential for change in this country, but I don't think this is the type of change that you - the hard-working employees - are looking for.  I'm concerned about legislation like this from an individual perspective for the following reasons:

#1.  Government has many roles, but there are two clear priorities that must be assured before any expansion of governmental purview is considered:  balancing the budget, and securing national defense.  Our national leaders clearly have much work to do on these priorities before attempting to delve into personal money management.

#2.  The foundation of any national economy is personal savings.  Taxing 401(k)'s is a quick way to dis-incent people from saving.  The recent housing market collapse provides plenty of evidence what happens when personal savings rates drop.

#3.  With layoffs on the rise, the last thing I want to see happen is for another industry to go belly up.  The personal finance industry employs hundreds of thousands of white collar workers many of whom will lose their jobs if the government over-reaches into private retirement account management.  The new jobs that will be "created" will be bureaucratic paper-pushing assignments.

#4.  This nation has always been all about opportunity.  The freedoms and wealth we have today are a result of the magnificent sacrifices that were made by generations that came before us.  The results of the recent election are a testimony to what hard work and merit can do for anyone from anywhere.  For many families, the 401(k) has been a means of building assets and creating opportunities for intergenerational transfer of wealth that assures a future for grandchildren and those to come afterward.  Dis-incenting people from making sacrifices today for the betterment of future generations will disincent the trend of self-sacrifice that has benefited our generation.

Pay attention to this legislation - then call your elected officials and make your voice heard.

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