TRENTON, N.J. – A bill making it more affordable for residents to save for retirement is being considered by the Legislature after the Assembly Financial Institutions Committee heard testimony this week. Sponsored by Assemblymen Anthony Bucco and Edward Thomson, the measure (A4899) exempts contributions to qualified retirement plans from the state income tax.
“New Jersey taxes the daylights out of people, making it difficult if not impossible for them to save for retirement,” said Bucco (R-Morris), who first introduced legislation creating the exemption in June 2017. “Workers can’t prepare for the future. They simply don’t have the means to save enough if their contributions are taxed.”
A poll by AARP found that 80 percent of New Jersey residents are concerned they can’t save enough for retirement.
“This will help people save on taxes and use that money to help fund their retirement,” said Thomson (R-Monmouth). “We know people are leaving the state at an alarming rate, and many are seniors who can’t afford to live here on social security. By making it easier for them to grow a retirement nest egg, we can keep more New Jerseyans in New Jersey.”
The state is one of three that doesn’t allow people to exclude retirement contributions from taxes like the federal government. New Jersey is also ranked the second worst place to retire in the country, according to WalletHub, which considered affordability as a main factor.