- The Washington Times - Wednesday, October 25, 2017

House Ways and Means Committee Chairman Kevin Brady said Wednesday lawmakers are exploring possible changes to retirement savings plans as part of the GOP’s tax overhaul, after President Trump said earlier this week there would be “no change” to 401(k) plans.

“We’re working very closely with the president,” Mr. Brady said at a breakfast with reporters hosted by the Christian Science Monitor.

“We are continuing discussions with the president — all focused on saving more [and] saving sooner,” he said.

Mr. Brady said half of people who contribute money to 401(k) and IRA retirement plans are saving $200 or less per month.

“We think we can do better,” he said.

Many people aren’t starting to save until they’re older and “until they’re much higher on the economic ladder than you would expect,” he said.

“So we are exploring a number of ideas in those areas,” he said.

Earlier in the week, though, Mr. Trump said there would be “no change” to people’s 401(k) plans.

“There will be NO change to your 401(k),” the president tweeted. “This has always been a great and popular middle class tax break that works, and it stays!”

GOP leaders are continuing to hunt for potential revenue streams to help pay for some of their tax cut package, and reducing the amount of pre-tax money people can contribute to their 401(k) retirement plans would be one avenue to do that.

But if there are changes to incentivize people to save even more, as Mr. Brady suggested, that could move things in the other direction and increase the price tag of Republicans’ tax reforms.

People under the age of 50 can currently contribute up to $18,000 annually in tax-deferred savings to 401(k) retirement plans, and people older than 50 can contribute an additional $6,000 per year in “catch-up” savings.

For IRAs, the annual limit is $5,500, with an additional catch-up contribution of $1,000 for people older than 50.

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