Παρασκευή, 5 Απριλίου 2013

Covered at Reason 24/7: Obama Wants To Limit Retirement Accounts


Reason 24/7Complaining that "some wealthy
individuals are able to accumulate many millions of dollars in
these accounts," the Obama administration announced a plan to cap
the total sum of any individual's retirement accounts at $3
million. Stashing cash beyond that point, the administration
insists, builds sums "substantially more than is needed to fund
reasonable levels of retirement saving." The administration's
argument seems to be based on the use of the word "million,"
implying that only nasty rich people would want to accumulate such
a hoard. But is that true? How much is enough for "reasonable
levels of retirement saving."


As it turns out, that's one of the toughest questions to answer
for retirement planning. Many advisors suggest you base your
retirement savings on something like 70 percent of your
pre-retirement income, multiplied by how many years you expect to
live. So ... Just when do you plan to kick off? As
one article on retirement planning puts it
, "basing your
retirement needs on income is like basing your fuel needs on the
size of your car’s gas tank. What really matters is how far you
have to go and what kind of gas mileage you get." Part of that "gas
mileage" for retirement planning includes inflation. By the time
you retire, will $3 million buy luxury? Or a sandwich?


From
Bloomberg Businessweek
:



President Barack Obama’s budget proposal would cap
multimillion-dollar tax-favored retirement accounts like the one
held by Mitt Romney, his Republican rival in 2012.


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. ...


Brian Graff, executive director and chief executive officer of
the American Society of Pension Professionals and Actuaries, said
his group will “vigorously oppose” the idea.


“It is a ‘plan killer,’” he said in an e-mailed statement. “As
business owners reach the cap, they will lose their incentive to
maintain a plan, and either shut down the plan or greatly reduce
benefits. This would leave workers with a greatly diminished plan
or without any plan at all.”



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