For millions of Americans, tax benefits can be a wonderful thing. In fact, for many individuals, tax benefits are a big reason why certain choices are made when planning for retirement. One example of this is the tax benefits that come with a 401k plan. If you're one of the millions of investors who have made a 401k plan a large part of your financial portfolio, we have a few facts that you should be aware of involving tax deductions and how their future might be threatened.
Fact #1: A 401k plan is a big part of many retirement plans.
Having a 401k as a part of your retirement plan can be a highly beneficial choice for you and your family. Yes, they do have flaws, but so do basically every retirement plan you can think of. They are a welcome addition to the family of retirement accounts that make up your portfolio. This is even truer if your employer matches your contributions. 
Fact #2: Tax deductions mean a lot to current 401k plan holders.
As previously stated, everyone likes a good tax deduction. Without them, many retirees wouldn't utilize certain accounts. This is true for 401k plan holders, as well. For example, any contributions you make into your 401k plan can be written off as a tax deduction. Employers are permitted to do this as well. In fact, many employers probably wouldn't participate if these tax deductions were not available, because it could translate to quite a bit of money.
Fact #3: To lower marginal tax rates, one option would be to remove 401k tax deductions.
Government officials have recently been discussing what can be done in order to lower marginal tax rates. While nothing has been discussed in great details, many financial experts believe that one such strategy could be to eliminate these benefits. Obviously, no one can know for certain if or when this might happen, but given the current state of the economy and the vast popularity of 401k plans and the tax deductions that go along with them, it is definitely a possibility.
Fact #4: Businesses and consumers would both feel the sting.
If the government was to push for the elimination of 401k tax deductions, the effect would be felt by both businesses and consumers. For consumers, this could translate to a loss of strength in their retirement plan. For employers, many of them might choose not to participate in a 401k plan, which would, in turn, negatively impact their employees, as well.
Fact #5: The government could decide to make 401k plans work like Roth accounts.
With a Roth account, taxes are paid on any funds put into the account right now. Then, when you retire, income derived from this account would be tax-free. If the government so decided, they could alter 401k plans to work in this fashion. This would ensure that the government is able to obtain money upfront, and then you would benefit in the future. Granted, this type of change is not likely to occur, but it is still possible.
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