Keeping with no tax on tips & no tax on social security you may want to consider no tax on withdrawals from 401k’s. So many Americans have been forced into 401k’s because their employers went away from defined benefit pensions. While that is not the case with Civil Service jobs or most union jobs there is a segment of the working class that is at a disadvantage when it comes to their retirement.
Most Americans fund their 401k’s whether it be to the maximum level & some get some form of employer match but it is evident that American’s w 401k’s are at an extreme disadvantage vs those with defined pension benefits. The average worker probably doesn’t have enough funds in their 401k to last more then a few years.
In addition they are subject to the fluctuations of the market in the hope the average citizen investor makes the right choice in investment of their corpus. Providing pre tax funding & no tax withdrawal will go a long way to even up the playing field vs the defined pension benefit crowd.