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The Hitchhikers Guide to Retirement

I doubt Douglas
Adams had retirement policy in mind when he said, “It’s not the fall that
kills you; it’s the sudden stop at the end.” 
However, that quote explains why Congress
should keep their mitts (hands, not a horde of Romney clones) off the employer-based retirement system as they try to solve
our country’s economic woes.The deficit is big. Really big. You just won’t believe how vastly hugely mind-bogglingly big it is. Whether or not we fall off the fiscal cliff, the country’s
financial situation will fall further into decline unless we reverse course and
start living within our means.It
doesn’t take a babel
fish to understand this means cutting spending and/or raising taxes.  Although the Republicans and Democrats have
different ideas about where the appropriate spending cut/tax increase balance
lies, both parties recognize that it will take some of both.This is where retirement policy enters the picture.  Most contributions to retirement plans (such
as 401(k) plans), whether made by companies or workers, are tax
deductible.  That means for every
dollar that goes into a plan, the government collects a little less in tax revenue.  When adding together all contributions made to all employer-based retirement plans, this tax
deduction represents one of the largest in entire tax code.  That makes the retirement system a prime
target to increase tax revenue by reducing contributions.While some in Congress and in the media suggest that reduced
contributions would only hit the top end of the income spectrum, the
reality is that many low to middle income workers would be hurt even more. Households earning less than $100,000
per year receive more than 60% of the tax benefits from company retirement
plans. The companies that sponsor those plans must expend time and resources to properly maintain them and manage the associated liability.  If business
owners lose the tax deductions on their own contributions and are required to provide higher benefits to their employees than they receive
themselves, there is not much incentive to deal with the burden of having a plan in the first place.  That means all those benefits for households making less than $100,000 go down the tubes.  If Congress cuts the amount employees and companies can contribute to their retirement plans, everyone
loses.  Plans are killed, and retirement savings come to a sudden stop.More than 70% of low and
middle-income workers save when they are covered by a workplace retirement
plan; whereas, fewer than 5% save when they don’t have access.  If you think the current economic situation
is bad, just wait until an entire generation tries to retire without having had
access to a solid employer-based retirement system.
Don’t panic!  There is
something all of us can do.  One of the
top priorities for those in Congress is to stay in Congress.  That means if enough people voice an
opinion, Senators and Representatives listen; and it is very easy to voice your
opinion.If you are reading this, I ask you to do three things.Visit www.SaveMy401k.com.  There is a link on the main page that lets
you e-mail your members of Congress to tell them to keep their hands off your retirement
savings. It takes less than a 60 seconds.If you’re into the whole social media thing,
SaveMy401k is on Facebook, Twitter, YouTube and LinkedIn.  Please Like, Follow, Subscribe and/or Join.Spread the word to friends, family, clients, bosses, co-workers and anyone else who will listen.  Use word-of-mouth, e-mail or social media.  The more people who speak up, the more
clearly Congress will get the message.Retirement policy may not be the answer to life,
the universe and everything, but it does impact everyone from business owners
to managers to employees, regardless of industry, age or income level.The last time Congress decided to raise revenue by cutting contribution
limits (in the 1980s), companies killed off their retirement plans in
droves.  Let’s remind them how big of a mistake it was then and make sure they don’t repeat it in the future. 
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