Retirement experts worried that lowering limits on pretax contributions would steer individuals to make the wrong decisions with regard to their retirement savings.
Most Americans are already facing a shortfall when it comes to how much money they will have in retirement and how much they will need.
Households approaching retirement had just a median $135,000 saved in 401(k) and individual retirement accounts in 2016, according to research from the Center for Retirement Research at Boston College. At the same time, about half of households close to retirement had no 401(k) savings.
A move to a Roth IRA (where money is taxed upfront) could have negative behavioral consequences, said Jack VanDerhei, research director at the Employee Benefit Research Institute, an independent organization that provides research on employee benefits.
Savers who are young or who have low account balances might not be discouraged enough from taking the money out because they have already paid taxes on those balances, VanDerhei said.
Individuals who are participating in these employer-provided plans need to know that any threshold is not necessarily the recommended amount they need to save in order to retire, he said.
"It's just absolutely imperative that they figure out how much they should be contributing and keep doing that regardless of how much is tax deductible," VanDerhei said.