Pub. 2 2012-2013 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S July • August 2012 17 As important as dependable employment and worker com- mitment to saving are in the retirement confidence equation, still other factors are beyond the worker’s control. The April congressional hearings described earlier could yield several possible outcomes. The retirement savings preferences in the Internal Revenue Code could remain unchanged. Or, there could be well-intentioned congressional action to streamline and simplify the options presently available without greatly sacrificing tax-favored saving options. Finally, forces favoring substantial—even radical—changes to the Tax Code could lead us to a simpler tax structure at the expense of targeted saving incentives. These savings incentives include such things as the home mortgage interest deduction, hiring incentives, energy subsidies, and, of course, the tax incentives to save for retirement. Temporary tax deferral is the most prevalent of these incentives, but some savings ar- rangements like the Roth IRA, Coverdell Education Savings Account, and Roth contributions in employer plans can yield tax-free earnings. Some lawmakers look to these tax preferences—perhaps inaccurately and unfairly calling them “tax expenditures”— as a source of revenues to offset other tax reforms. Scaling these tax preferences back, or eliminating them, would make available revenues for the broader tax reforms some are seeking. But at what expense?With confidence in a secure retirement lacking already, as the EBRI survey shows, what would be the prospects for secure retirement if there are even weaker incen- tives to save for that stage of life? 