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Obama’s budget plan, to be unveiled April 10, would prohibit taxpayers from accumulating more than $3 million in an individual retirement account. That proposal would generate $9 billion in revenue for the Treasury over the next decade, according to a White House statement released today.
“Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving,” the statement said.
A White House official put it this way to Politico: Obama's proposal caps retirement accounts at an amount that would provide someone about $205,000 per year in retirement.
Does this person havea clue about draw down rates especially with current fed policy? What the heck? If it was 10 million or more it wouldn't be as ridiculous.
What happens when you are about or do hit the cap? How do you avoid hitting the cap if you are younger than the required ages to draw down without consequences etc etc?
I bet if u hit the max he will try to take it and give it to programs that are needed to feed and give phone to the lazy who dont want to work but wants as many handouts they can get. then complain they dont have enough
Big deal. Qualified retirement accounts are overrated anyway. You wouldn't want a retirement account that size anyway (as opposed to a taxable brokerage account).
Just invest excess income in taxable brokerage accounts. You have more control and guess what - you could pay less taxes too!
Just invest excess income in taxable brokerage accounts. You have more control and guess what - you could pay less taxes too!
Celcius is right on about that. Invest your excess funds in a taxable account, and by paying taxes on it now, you'll more than likely pay a lower rate than you would in the future, all things considered.
The devil is in the details - and there are no specifics at this point ... probably just floating a trial balloon, for now. Too much pressure from important people and the 'idea' will go nowhere - sorta' like gun control. Or be modified considerably upward. Although the govt certainly has its hungry eyes on the money in those accounts - especially since it had to back off somewhat on the estate tax. It may be that because, as the articles mention, people use these accounts to pass on wealth, this is a back door way of retrieving income from the lost estate tax reduction.
The devil is in the details - and there are no specifics at this point ... probably just floating a trial balloon, for now. Too much pressure from important people and the 'idea' will go nowhere - sorta' like gun control. Or be modified considerably upward. Although the govt certainly has its hungry eyes on the money in those accounts - especially since it had to back off somewhat on the estate tax. It may be that because, as the articles mention, people use these accounts to pass on wealth, this is a back door way of retrieving income from the lost estate tax reduction.
My guess is that you will see the 200-210K income number being used as a threshold for means testing on any number of future budget proposals. Example SS and Medicare etc etc etc. This could be a trial balloon to establish a dollar amount for future proposals. Part of the issue is with estate planning and the ability to pass on your IRA as an IRA to your children. Romney at one point had up to 100 millon in his tax free accounts. Sorta sounds like something out of Ed Slotts book warning us.
I've always thought tax-deferred IRAs and 401ks were a wonderful vehicle, and then later the Roths which for some people are a bonanza in retirement. My employer started their 401k in 1985 or 1986. I remember thanking the head of the firm for doing that. But, they were late to the game. To me, the company match wasn't as important as the tax-deferred feature. Clearly, these days, many people have a lot of money in these accounts. That, together with generous employer retirement benefits, provides more than a comfortable retirement among a wide swath of the population. Government probably has been looking at these accounts for a long time. No doubt they have internal reports generated for 10-15 years on taxes the government isn't collecting because of them. I've always believed sooner or later that 'gravy train' would be restricted in some way. Actually, why has it taken them so long?
Last edited by Ariadne22; 04-05-2013 at 06:36 PM..
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