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

Complaining 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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JIM ROGERS: 'You Better Run For The Hills'

The EU/IMF raiding bank accounts in Cyprus to bail out the country's financial system sets a dangerous precedent and investors should "run for the hills" said investor Jim Rogers, chairman of Rogers Holdings, on "Squawk on the Street" Thursday. 

Rogers said that with Cyprus, politicians are saying that this is a special case and urging people not to worry, but that is exactly why investors should be concerned.

"What more do you need to know? Please, you better hurry, you better run for the hills. I'm doing it anyway," Rogers said. "I want to make sure that I don't get trapped. Think of all the poor souls that just thought they had a simple bank account. Now they find out that they are making a 'contribution' to the stability of Cyprus. The gall of these politicians."

"If you're going to listen to government, you're going to go bankrupt very quickly," he added.

"I, for one, am making sure I don't have too much money in any one specific bank account anywhere in the world, because now there is a precedent," he said. "The IMF has said 'sure, loot the bank accounts' the EU has said 'loot the bank accounts' so you can be sure that other countries when problems come, are going to say, 'well, it's condoned by the EU, it's condoned by the IMF, so let's do it too.'" 

Jim Rogers, a voice closely followed by market participants, began shorting financials, home builders and Fannie Mae in 2006, and is famous for co-founding the Quantum Group of Funds with billionaire George Soros. Quantum is famously regarded for "breaking" the Bank of England and forcing a devaluation of the pound.

Rogers said that he has started the process in several European countries to get his bank accounts under the insured amounts. "Everybody should do the same thing too, because they're going to go crazy the next time around," he said.

In Europe, Rogers said that he owns Swiss francs and several long-term investments he's had for decades, but added that he is "certainly not buying there. It's pretty scary what's going on in Europe, especially when they're taking money out of people's bank accounts."

On the stock market hitting all-time highs, Rogers said that "it is very artificial. If you give me a trillion dollars, I'll show you a good time too and a lot of people are having a good time. I'm somewhat skeptical because I know it's going to end badly." 

"I'm certainly not investing in the U.S., because the U.S. is making all-time highs based on money printing," he said, adding that he's put money in Russia and Japan recently. "The whole world is benefiting from all this money being printed, but there are better places than where the all-time high is." 

— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul

 

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