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April 2018
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Opinion
by U.S. Senator Dean Heller
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Tax Reform is Helping Boost Nevadans’ Retirement Savings 

 U.S. Senator Dean Heller
U.S. Senator Dean Heller

In more ways than one, tax reform continues to give hardworking Americans a much-needed lift.

From companies distributing $1,000 bonuses to local job creators announcing higher starting wages, there’s plenty for us to clap about when it comes to the Tax Cuts and Jobs Act.

But a little less publicized – yet just as important – benefit born out of tax reform is that more Americans are seeing an increase in their retirement savings.

It has been just three months since the Tax Cuts and Jobs Act became law, and more than 400 companies, including many that employ thousands of Nevadans, have made pledges involving pay raises, paid days off, or enhanced employee benefits like parental leave as a direct result of the new law.

Of those companies, several are also choosing to use their savings from tax reform to reinvest in their workers by significantly increasing contributions to employees’ 401(k) retirement accounts.

For example, in response to the Tax Cuts and Jobs Act becoming law, Visa is increasing its 401(k) matching program up to 5 percent of an employee’s base salary. Other businesses that made similar announcements to the credit card company include insurance giants Nationwide Mutual Insurance Co. and Aflac Inc., the latter of which is boosting the company’s 401(k) match from 50 percent to 100 percent on the first 4 percent of employee contribution and doling out $500 to every worker’s 401(k) plan.

More cash in Americans’ retirement accounts could not come at a better time as Nevadans continue to bounce back from the Great Recession. During those tough years it was not uncommon for families to suspend contributions or tap into their 401(k) plans to make ends meet. Moreover, many Americans were laid off, therefore losing out on the opportunity for their employer to match any funds at all.

Another reason these 401(k) increases are notable is because data indicates that many Americans are not financially prepared for their retirement years. According to a new Bankrate survey, nearly one in five Americans have not saved any of their annual income. Furthermore, Nevadans are more likely to be living paycheck to paycheck than Americans living almost anywhere else, real median household income is down $7,000 from 10 years ago, and childcare and housing costs have skyrocketed.

During a recent TeleForum with NFIB/Nevada, roughly 9 in 10 Nevada business owners said they plan to take action that includes increasing workers’ wages and investing in their companies.

I truly believe our country is heading toward a new era of prosperity and growth thanks to the Tax Cuts and Jobs Act, and that this wave of recent news is only the start of more good things to come. Because of the tax bill, the U.S. Department of the Treasury estimates that 90 percent of wage earners will experience an increase in their take home pay. Additionally, every income category of Nevada’s roughly 1.4 million individual tax return filers is expected to receive a tax cut.

With the first quarter of 2018 soon behind us, tax reform is proving to be beneficial to workers and the families that they support. I’m proud to have been a part of the team to push this bill through Congress, and I look forward to seeing what the rest of the year brings for Nevada’s families and workers.