A strong majority of U.S. households is opposed to any proposal that will remove or reduce tax incentives for retirement savings, according to a survey by the Investment Company Institute.
The survey polled respondents about their views on defined contribution retirement account saving and their confidence in 401(k) and other DC plans, a timely topic in light of President Obama’s proposal to eliminate tax incentives for defined contribution plans to help save the government money.
In fall 2013, 86 percent of households disagreed that the government should take away the tax advantages associated with 401(k) plans and 83 percent were against reducing the amount individuals can contribute to these retirement vehicles.
Even households that don’t have access to a DC plan or IRA are supportive of the tax treatment of these accounts, the survey found. Eighty-one percent of households without DC accounts or IRAs rejected the idea of taking away the tax treatment of DC accounts.
A high majority of households also believe individuals should be able to make investment decisions in their DC accounts and more than eight in 10 disagreed with replacing all retirement accounts with a government bond, according to ICI.
The survey also found that 66 percent of U.S. households had favorable impressions of 401(k) and similar plans in fall 2013, compared to 65 percent in 2012.
Among those expressing an opinion, 92 percent had a favorable impression of 401(k) plans and 46 percent said they had a very favorable impression.
The majority of households with access to a DC plan said that these plans help them think about and save for the long-term. More than four in 10 households with a DC plan said they probably would not be saving for retirement if not for their DC plan.
Even households that don’t have access to a 401(k) or IRA expressed confidence that these types of accounts help people save enough for retirement.