Dodged a bullet? "Rothification" likely to reduce retirement saving

Abstract

The brief's key findings are: (1) As part of tax reform, Congress considered changes to 401(k)s that would require most new contributions to go to a Roth, rather than a traditional, account. (2) This budget gimmick would help pay for tax cuts because Roths are taxed up-front, rather than in retirement. (3) Such a change, however, could also affect how much people save. (a) Some could save more by keeping their contribution steady. (b) Some may save the same by reducing their contribution to maintain their take-home pay. (c) But many, especially those who have lower incomes or are cash-strapped, may overreact and save much less. (4) Rather than risk disrupting the retirement savings system, a better idea is to focus on actions to boost saving and expand access to workplace retirement plans.