Economists Float Eliminating 401(k) Tax Breaks to Bolster Social Security, Though Changes Seem Unlikely

Two economists proposed eliminating 401(k) tax benefits to help fund Social Security, sparking debate about retirement policy.

The proposal isn't likely to happen soon, but shows ideas gaining traction for addressing Social Security shortfalls.

The tax benefits don't significantly boost savings rates and disproportionately help high earners, the economists argue.

Shrewd retirement planners should still utilize 401(k)s up to employer match levels and consider other savings like IRAs.

The proposals are a reminder that future Social Security benefits may cover less; strive to save 15% of income across accounts.