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How Your 401(k) Is In the Cross-Fire of Trump and the GOP's Tax Reform Plan

Employees would likely contribute less to IRA accounts

If the proposal passes, there is a strong indication that U.S. workers will either shift their savings to Roth Individual Retirement Account (IRA) accounts, where contributions are taxed immediately or employees and employers will contribute less for retirement.

Demos, a non-partisan public policy research and advocacy organization, issued a report called The Failure of the 401(k) which stated that most workers in the bottom quarter of the income distribution do not have access to workplace retirement benefits. For those that do have workplace retirement plans, employees rarely hit the IRS max contribution. Many workers believe the government's cap is an implicit endorsement of the optimal savings level and work toward that target.