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If they take away the deductibility of 401k plans, I imagine that most retirement contributions will be re-directed by individuals to their Roth IRAs, for obvious reasons.
The "new" plan the Dems are talking about would essentially be a forced savings plan for all Americans, that pays 3% and is also adjusted for inflation.
Now, I personally abhor being told what to do with my investments, but the success of this program really depends on what lies ahead, in macro-economic terms.
Let me explain:
Everything right now points to a recession, but there are increasing concerns that hyper-inflation may follow that recession. If that happens, God help us all. Nothing survives that event, unless you are a very astute investor, and know which investments will save your bacon. Most American's 401k accounts would be completely wiped out.
HOWEVER, if Americans are forced to save money, in accounts that are inflation-protected, that money may turn out to be the only pension they would have after such a macro-economic event, in addition to social security.
CBSMarketWatch, before they became just MarketWatch, had an article one time that stated only 8% of Americans save enough for retirement. The other 92% depend heavily upon social security. If that is the case, the additional forced savings the Dems are proposing would be a lifeline to that 92%, particularly after a hyper-inflationary event.
Personally, I believe I've taken the appropriate steps to protect my family from both a depression, and also from hyper-inflation. Most Americans have not, though, and would probably suffer greatly as a result.
Maybe the Dems/Congress know something we don't. Or maybe they're just being Dems...
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