Republicans are finally making moves on tax reform. And the effort could affect your retirement.
After failing to repeal Obamacare, taxes have become a prime target for President Trump and are currently his "highest focus," says Treasury Secretary Steven Mnuchin, according to Politico. And, as the government grapples with how to raise revenue to offset any cuts, negotiators are drawing inspiration from former Republican Rep. Dave Camp's 2014 tax plan.
One "idea quietly being discussed," Politico reports, is to tax the money employees designate for their 401(k) plans up front.
Currently, any money placed in a 401(k) plan is tax-deferred. Taxes are paid upon withdrawal, which starts at age 70½ at the latest.
A change to the rules would go against statements previously made by the White House, which assured reporters following the initial announcement of Trump's proposed plan that, despite some confusion, reforms would not affect 401(k) contributions.