Dear President Trump
For many years, I have been working as a Certified Financial Planner, Fiduciary and insurance and annuity expert. As Americans we both share a keen interest in helping our fellow citizens prepare for a secure retirement.
You and I also share a strong interest in taking care of our senior citizens without exhausting Social Security.
I am writing today to share with you an idea that could benefit tens of millions of Americans and that could bring national attention to you and other elected officials who support this idea:
Expanded Roth retirement accounts.
A bill to expand Roth retirement accounts would make it easier for more people to have these powerful retirement accounts.
As you know, contributions to a Roth retirement account are not deducted from a person’s taxable income. You pay taxes on all of your income now but the major benefits you get in exchange are that all your earnings in that account grow without taxation and when you take the money out in retirement no taxes are owed.
While there are currently Roth options for IRAs and a small number of 401(k) programs, I believe that almost all retirement programs, including all 401(k) plans, 403(b) plans used by schoolteachers and employees of non-profits, and 457 programs used by government employees should have a Roth option.
The benefit for the government for making the Roth option available for almost every type of retirement program is a huge immediate influx of tax revenue that could amount to hundreds of billions of dollars. This money could be used to help reduce the national debt or for other needed purposes.
I also believe that many pension programs should be given a Roth option. This bold proposal could bring in additional billions of dollars of immediate tax revenue.
As we know, you want to cut taxes. Since this will lead to lower revenue for the government, another measure is needed to increase tax revenue, and I believe expanded access to Roth retirement programs is it.
By giving millions of our citizens, the option of having a Roth retirement account, a great deal of tax revenue could be raised.
The key here is CHOICE: no one would be forced to have a Roth retirement account. Therefore, the taxes they would have to pay on their income that goes into their Roth retirement account would be VOLUNTARY taxes that they elect to pay now in exchange for never having to pay taxes on these Roth accounts ever again even as their retirement accounts continue to grow year after year.
The legislation I am suggesting you support would be simple yet powerful: give every working American the choice to contribute to whatever retirement program they have each year via a Roth contribution or a regular contribution.
Also, many companies offer employer matches, especially for 401(k)s and for some pension plans. I believe that these employer matches should also be available in the form of a Roth or a regular contribution. This could bring in additional billions in immediate tax revenue.
Many of our senior citizens are in terrible shape financially. By the time they retire, all their tax deductions have been used up. They have paid off their mortgage, are no longer paying tax deductible tuition, their children are grown and gone, and they have closed or sold their business. All the tax deductions that these all once provided are gone.
When they take money out of their regular retirement plans, they must pay taxes on that income at their highest rates. If they had been given the option of investing in a Roth retirement account earlier in life, all the money they take out of their Roth accounts would be tax free making them more financially independent and less dependent on the government.
We all know that Social Security is on the verge of insolvency. In less than 10 years, we are going to have to start reducing Social Security benefits which will be devastating to many of our retirees. If these people and younger people were all given the choice of setting up Roth accounts, they would be much less dependent on Social Security.
Due to advancements in medicine, our seniors are living longer and longer. Having a Roth retirement plan option would provide them with the tax-free income they will require to pay for the expenses of a long life. Age 65 used to be considered “old age” and is now discussed as “middle age.”
I think that your supporting legislation to make the Roth option available on all retirement plans will make millions of people grateful to you forever for providing them a pathway to enjoy a tax-free retirement income.
Thank you for your consideration of this important legislation. I am happy to talk with you about this by phone or in a Zoom meeting or in a personal meeting.
Sincerely,
Nancy Hite, CFP, AIF, CLU, ChFC, RFC
Cell Phone: 561-929- 4200
Email: NHite@TheStrategicWealthAdvisor.com
