Proposal to cap 401k and other tax accounts once you reach a certain amount, what do you think?
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Anonymous
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Can someone explain this? Does this mean that once you reach a certain amount of savings you are not allowed to save anymore? Or do you just lose the ability to save pre-tax?
Limit savers' combined balance across tax-preferred accounts: Last year, the president introduced the idea of prohibiting contributions to tax-advantaged retirement accounts when a person's combined balance exceeds a certain level. Such accounts include IRAs, 401(k)s and pensions. The cap on the combined balance would be based on a saver's age and would vary over time based on factors such as inflation and interest rates. Last year, for instance, the limit would have been $3.4 million for someone who was 62, but just $1 million for someone who was 40, according to a Tax Policy Center report. The cap would be based on what it takes to buy a "maximum benefit" annuity at age 62, with a 100% survivor benefit for one's spouse. In 2013, a maximum benefit annuity would have provided $205,000 a year. http://money.cnn.com/2014/02/04/pf/taxes/retirement-tax-breaks-obama/index.html?iid=s_mpm |
Anonymous
| yikes. thanks for the link. |
Anonymous
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Only 2 more years....
Only an idiot would try to pass a law to make sure that we all suck off the government teat in our "golden years". keep your GODDAMN hands out of my bank account! he is an idiot extraordinaire!!! |
Anonymous
It just means that you couldnt contribute to your 401K after a certain point. Similar to how 529 plans are capped. I wouldnt worry about it, it wont pass. For starters it adds complexity, second, it does nothing tangible to our debt, and third, it doesn't make a meaningful dent in most retirement plans anyway. And like everything else, there's a way around it anyway. For instance, at my firm you get access to a deferred comp plan in addition to 401k, so I could simply contribute whatever my 401k allows then just make up the balance in deferred comp, which also offers tax deferred growth in nearly an identical way as the 401k. |
Anonymous
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Yikes? This is a proposal designed to keep people like Mitt Romney from avoiding taxes through massively overfunded retirement accounts.
Makes sense to me. |
Anonymous
that is a fucked up way to think PP. you truly hate the rich....funny thing is most of the wealth in this country is being held by liberal asses. |
Anonymous
| I truly hate the rich when they think they shouldn't pay any taxes ever for any reason. |
Anonymous
You mean like the majority of the ultra-wealthy liberals? be careful to not go down that path PP. You dont know what you're talking about. |
Anonymous
This has nothing to do with Mitt Romney. If they want to go after deferred compensation for executives, that's one thing. This is caps on regular 529 plans. I'm a hardcore Dem and I don't support this. What nonsense. That said, I would support repealing the Roth IRA. |
Anonymous
Why? |
Anonymous
Mitt's "I put $10K worth of stock into my 401K" which he then somehow had revalued at $20M or something absurd like that was pretty sleazy though. |
Anonymous
yeah this exactly aimed at Romney and similar tactics-- idea being that you get a tax break for retirement saving, but if you have enough retirement saving to provide a pension of $200k a year, with 100% survivorship benefit, you don't need any more tax breaks. That said, it's one of those things the policy wonks like that will never go anywhere. |
Anonymous
| Yeah I bet wonks thought an individual mandate to force people to buy insurance from private companies would never go anywhere either. |
Anonymous
Purely from a revenue standpoint, the out-year costs of that policy are staggering and unsustainable. From a policy standpoint, I am uncomfortable with people accumulating vast amounts of wealth that can grow tax-free. |
Anonymous
I think 529s already have caps. |