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The Up Side to Tax Reform Uncertainty: Reach Out to Clients

David R. Blask

One priority of the Trump Administration and many members of Congress is tax reform. While the final form of legislation is far from certain, ideas frequently being mentioned include the reduction, or elimination, of pre-tax deferrals to a 401(k), 403(b), or 457(b) plan. Proposals are also being suggested to combine all these plan types into a single, 401(x) type plan with one set of rules.

While these proposals are discussed and debated, now is the time to reach out to your clients to stress the importance of taking full advantage of their ability to contribute substantial pre-dollars.

Here are key points to stress:

  • Pre-tax deferrals may be reduced or disappear – 2017 is the year to maximize contributions.

  • Many public school employees can contribute to both a 403(b) and a 457(b) plan. This ability to “double dip” will disappear if different types of contributory plans are consolidated into a single tax type.

  • Both 403(b) and 457(b) plans offer unique catch-up contributions that are not available in 401(k) plans. If eligible, participants should take full advantage of these provisions while they are still available!

Times of uncertainty usually contain opportunity. Help your clients understand where they may lie.

David R. Blask, CPC, TGPC, AIF® is Senior Pension Consultant, Lincoln Investment Planning.

None of the information in this document should be considered as tax advice. You should consult your tax advisor for information concerning your individual situation. 03/17

Opinions expressed are those of the author, and do not necessarily reflect the views of NTSA or its members.