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CBO Releases Utilization of Tax Incentives for Retirement Saving

Cbo_4_1The Congressional Budget Office has released Utilization of Tax Incentives for Retirement Saving: An Update.  Here is part of the Summary and Introduction:

This paper updates the CBO’s Utilization of Tax Incentives for Retirement Saving (August 2003). That paper examined participation rates and contributions to employment-based retirement plans, individual retirement accounts (IRAs), and Keogh plans in 1997. This paper presents comparable figures for 2000 and shows how patterns of utilization changed between the two years.

The paper also presents data that were not available in 1997. Roth IRAs, for example, became available in 1998 and now provide an alternative to traditional IRAs that most taxpayers can choose. Roth IRAs differ from traditional IRAs in that contributions are not deductible, but withdrawals are exempt from tax. In addition, information on contributions to simplified employee pensions (SEPs) and savings incentive match plans for employees (SIMPLEs) is now available for 2000. The 2000 data show, by age and income group, participation rates and contribution levels for all of those types of plans for all workers filing tax returns.


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