401(k) FIDUCIARY FILE A Really Awful Retirement Income Tax Idea EVERYONE KNOWS the state of Illinois is in terrible financial shape after perpetually spending more than it takes in (last balanced budget in 2001), and still faces a huge burden in underfunded pension obligations. And now it could get worse. The Chicago Tribune recently reported that nonpartisan budget watchdog Civic Federation has joined the Civic Committee of the Commercial Club of Chicago in calling for Illinois to tax retirement income-including 401(k) plan distributions-as a way to address the state's fiscal woes. The Civic Federation's Institute for Illinois' Fiscal Sustainability's annual " budget roadmap " says Illinois is one of only three states that have an income tax (out of 41) but do not tax retirement income. The Tribune piece notes that all of Illinois' neighbor states tax retirement income in some form. AARP quickly came out against the nonprofit groups' proposals to tax retirement income in Illinois. AARP Illinois state director Bob Gallo told Illinois News Network that retirees will leave in high numbers if retirement income is taxed by the state. Good Will Hunting: Why 401(k) Participants Need a Plan in Place EVER WONDER WHAT percentage of your 401(k) plan participants over age 50 have a will in place? If they're anything like Americans over 50 at large, just slightly more than half have a will, and only 18 percent have the recommended essentials of a will, a healthcare directive or proxy, and a durable power of attorney. That so many Americans continue to ignore an unpleasant subject and leave their legacy in limbo is among the more disturbing findings in Leaving a Legacy: A Lasting Gift to Loved Ones from Merrill Lynch and Age Wave. Although most Americans recognize that people should have this all taken care of before they turn 50, only about half have a will by that age-and less than one in five have tackled the will/health care directive/power of attorney triumvirate, even though most acknowledge that lack of planning can leave families in a bind. 10 ISSUE 2 2019 | 401kSpecialist.com ONLINE EXTRA © Welcomia | Dreamstime.com © Maxkabakov | Dreamstime.comhttp://www.Dreamstime.com http://www.Dreamstime.com http://www.401kSpecialist.com