Replies to post #153350 on Value Microcaps Motherboard

[swanlinbar]

Obama budget would pinch IRAs of wealthy with $3m cap http://bostonglobe.com/business/2013/04/09/romney-ira-obama-target-for-revenue-with-million-cap/lc3n7TbSiBwzYlLZWBLrZP/story.html

[dickmilde]

Here it is... IRA limits...

President Obama on Wednesday announced a plan that would prohibit individuals from reaping tax advantages on IRAs and other tax-preferred retirement accounts when funds exceed $3 million.

By proposing the cap as part of his 2014 budget, Obama is taking aim at those who stash many millions of dollars in tax-advantaged retirement accounts — which it argues is more than enough to retire comfortably.

A $3 million balance in a tax-preferred account like an IRA would currently allow a saver to finance an annuity of $205,000 per year in retirement. Removing the tax advantages for funds exceeding that threshold would save the government an estimated $9 billion over a decade, the budget estimates.

Based on the $3 million cap, less than 0.1% of IRA and 401(k) savers would be impacted, according to analysis from the Employee Benefit Research Institute. About 0.03%, or 6,180, of the 20.6 million IRA accounts in EBRI’s database had balances exceeding $3 million at the end of 2011, while 0.0041% of 401(k) accounts held $3 million or more by the end of 2012.

If the cap is tied to inflation and federal interest rates, it will fluctuate from year to year — with a lower cap hitting more people. For example, about 3% of 401(k) accounts would likely be impacted if the threshold were lowered to $2.2 million, EBRI found. And while 2.2% of savers ages 26 to 35 are on track to have retirement balances that exceed $3 million by the time they turn 65, 6% are expected to accrue balances over $2.2 million by that time.

Many other details are still unknown as well.

Some of the biggest questions: What will happen to balances that exceed $3 million — will the money be taxed or will savers be forced to move the excess amount out of that account? And what happens if a balance exceeds $3 million for a short period of time due to market gains, but then falls below the threshold again?
http://fox6now.com/2013/04/10/pres-obama-proposes-limits-on-iras-for-the-rich/

[budge]

they are talking about limiting the total amount you can have in tax shelted accounts. it's purely political. they don't want to wait for the taxes until you pull the money out. (taxwise it's a wash, now or later it's all the same) however, right now it is good politics to level the field and make it look like it's only fair that no one has too much when others have nothing. it's not fair that some have fat retirement accounts.

that term "need" keeps cropping up in the lectures we keep hearing. "at some point, haven't you made enough money?" or "i don't see why you'd need more that 3 million in your IRA."

It's also a prelude to meanstesting social security and medicare.

they don't want to wait for "their" money. call it receipt accelleration.