Obama Budget Would Cap IRAs at $3 Million

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I don't know about you, but it fries me when a proposal is cast out to the wind without any details. A $3 million cap on IRAs - on the surface, that sounds great, right? One more way to tax the rich and bring more money into the government to use for *worthwhile* programs. First, there are no details on how this would work, which worries me. More importantly, messing with IRAs bothers me a lot because the program was created to encourage people to save in these tax-deferred funds, whereas if those people who have millions socked away had known that their funds could be tampered with, they might have invested differently from the get-go.

Capping the IRAs going forward, now that makes some sense. But the plan as I understand it is all about forcing those who have saved in IRAs to pull out their money according to the government's schedule, disrupting the plans they had for their retirement. Bad politics, if you ask me.





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Since we are all about fairness, nowadays, if non-government employees (and let's face it, government employees don't need IRAs because they have defined benefit pensions) are going to have their IRAs capped at $3 million, then all public employees' pensions will need to be capped at whatever level will produce a similar payout. As a privately employed individual, I will need to save at least $3 million just to come close to what my public employee counterparts will be paid from their pensions in retirement. Money, I might add, that I have paid through my taxes.

NO One can put enough away to get 3 MILLION in an IRA - Most of the BIG money IRA's coem from rollovers when you leave a BIG company!!!

@Dagne - I work in the public sector for a large Midwest city and do enjoy a defined benefit pension (hopefully, no guarantees, depends if my city can stay afloat with reduced tax collections). Yes, we do need our defined contribution, or whatever vehicle is offered. There are no guarantees in life. I could slap a load of money into my defined contribution and lose that all, just like the pension office could lose everything too. (I know, not very likely, but there are cases. I trust nothing.) We all have a choice on where to work. I chose to work in the public and you chose to work in the private sector, both have plusses and minuses. Go ahead and cap my pension at $3,000,000 because I will not even come close to half of that if I collect my pension for 25 years. I really don't think I'll live to 87 (although, hopeful, again). Don't attack the public sector worker for items they were promised in lieu of private sector benefits. Trust me, as an accountant, I do not come close to private sector wages, but believe in what I do for my City and do enjoy paid time off to raise a family with. You have the choice, apply for a government job.

This is just one more example of an economics dunce meddling with the economy. If he's trying to bankrupt the US he's doing a great job.

Capping the amount in your IRA is a terrible idea! What if you've been saving the maximum since you started
working and getting positive returns on the investments within your
IRA. By the time you retire in your 70s with inflation you could
theoretically have quite a bit of money in your IRA. Every year our money buys less and that doesn't even take account that we could have periods of high inflation.
All I see is that this policy is punishing people who sacrifice now, in
order to plan and save for the future. It appears the government wants
us all to be on social welfare living in subsidized housing and leeching
off a bloated government instead of taking care of ourselves and being independent.