Obviously the fiscal cliff is on everyone's mind, but what does it mean for sponsors of 401(k) plans and retirement plan participants?
If nothing is done to avert the fiscal cliff, tax rates will go up, which "generally will make 401(k) deferrals more attractive because that's what 401(k) deferrals get you, an ability to defer taxes," said Brian Donohue, a partner with October Three LLC in Chicago, Ill.
Higher income tax rates and an increase in tax rates on capital gains and dividends, that are set to take effect in 2013, also would spur people to put more money away in their qualified retirement plans, he said.
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