Skip to comments.With Budget Proposal Obama Tells Us What Is A ‘Reasonable’ Amount To Have In Retirement Accounts
Posted on 04/06/2013 12:51:50 PM PDT by smoothsailing
With his budget proposal, President Obama has told us what he believes is a “reasonable” amount to have in a retirement account. $3 million is the number he chose.
According to a White House statement, the Obama administration believes the current rules allow some wealthy individuals “to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”
“The budget would limit an individuals total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million in 2013,” the statement said. “This proposal would raise $9 billion over 10 years.”
Brian Graff, executive director and chief executive officer of the American Society of Pension Professionals and Actuaries, told Bloomberg News his group intends to “vigorously oppose” the proposal. (Read More)
Progressives have had their eyes on Americans’ retirement accounts for quite some time. I guess Obama sees this as a good place to start. Or maybe it’s just a major jab at Mitt Romney.
President Obamas budget, to be released next week, will limit how much wealthy individuals like Mitt Romney can keep in IRAs and other retirement accounts. …
Romney, Obamas 2012 opponent, had an IRA several to many times that amount, leading to questions about how the former Massachusetts governor was able to squirrel away so much money in that sort of retirement account. (Read More)
To me it’s the idea of the gov’t inserting itself into your personal life i.e. retirement. They want to control all aspects of your life.
Good question. He has denied that anything like this could happen. Sometime I think Dave ignores the political direction this country is headed. Maybe he has more faith in the common voter than I have.
But I’ve been a saver long before Dave arrived. It wasn’t that long ago that if you actually needed a business loan, you couldn’t get one. So I’ve always lived within my means.
You will be in his sights when the dollar collapses. Your 30K savings in that 401K will become 3 Million in no time.
Seniors especially and every other investor has counted on interest on their savings. Our government has been stealing this money from us for 5 years with their convoluted Q Es.
I agree with both of your posts. The tax deferred limit seems to be the object of this idea.I really don’t think retirement investment plans will be seized outright. I can see how they may ALL loose tax deferred status at some point in time. I also had the same feelings about the Roth IRA conversions. It seemed hazardous.
This may never see the light of day in Congress, as you say. But the fact that The Won posed his argument by posturing about how much money a person needs for retirement is ridiculous. It was an arrogant and stupid statement (one of many) probably made to appeal to his base that may or may not have any retirement funds. But to any one who has any money in an IRA/401K...the alarm bells go off.
Unfortunately, IRAs are not a God-given right. They were created by Congress in 1974 with the passage of the Employee Retirement Income Security Act (ERISA). In this act, IRAs were introduced where participants were allowed to contribute a maximum of $1,500 of their annual taxable income into an IRA account. The IRA required funds to be held until age 59 1/2 before non-penalized distributions could be made. These distributions would be added to income and had to be started by age 70 1/2.
The IRA was changed several times by later Congressional acts, among these the 1981 Economic Recovery Tax Act; the Tax Reform Act of 1986; the Small Business Job Protection Act of 1996; the Taxpayer Relief Act of 1997; and the Economic Growth and Tax Relief Reconciliation Act of 2001.
So, it is sad but true that the government has the right to tell us the parameters of how our retirement accounts work and how much we can set aside. We can wish it weren't so all we want, but it clearly is within their purview.
An age of 52 or 53 seems like a long enough life for a black president.
Yassa Massa, I’se sure y’all knows what’s bestest fo me and my kin.
While he is taking for himself the majority of it.
[[$3 million is the number he chose.]]
What a moroon- MOST people lvie SS check to SS check because they SACRIFICED their wholel ives so their kids could have a chance at life- and are left with NOTHING i nthe savigns when they retire and have to live off of as little as $800 or so dolalrs a month-
3 million? What drug is he inhaling?
I once tried to reach a government class the facts you just related. They.most of them anyway, didnt want to believe it. That was because their parents believed it. The whole course of their economic lives would have to change if the stopped believing that they might not get a social security check when they got old. Having them read the two cases you cite did not persuade them. They thought they OUGHT to get those checks.
“Where does he get those rates of return?”
Remember, he’s taking into account that your retirement can’t be that long. You’ll be lucky to get 15 years, then the death panel will usher you off to the suicide booth.
Worth saying again...that was my first thought, too...WTF?? (pardon my language) Hello? this is America?!
Not that I have millions of dollars to invest in retirement accounts (would that it were so, but alas, not) but nevertheless, I will defend anyone's right to do with their WELL-begotten gains whatever they choose to! It's not (necessarily) a crime to be rich (or is it?)?!! SHEESH!
Could be that their parents believed it because that is how SS was sold to the public by the Feds. And is still being sold. Very few people care, or know, about these court decisions.
If SS/Medicare deductions are added to Fed withholding deductions people might actually go into sticker shock over the amount of current taxation.
I predict the same thing will eventually happen with OCare.
Who in the He## died and left him ghod?
Less than a billion dollars a year? What’s the point?
This is so infuriating. And of course, if you are a union ized public employee you can still ejoy your fat retirement. A lot of them in CA get more than $205K a year, and the taxpayers made all or most of the contributions.
I have pointed these facts out to people that think their SS contributions are secure, unlike “greedy wallstreet investors”. They are usually shocked.
I forgot where I read it but supposedly total for all accounts. 3 million sounds like a lot of money to people but when your talking about living comfortably middle class on it for 30+ years it’s not. But when the Republicans squak about it, it will be one more thing he can tell that they are sticking up for the rich. And the hypocritical public employee unions that have better pensions will be saying it too.
And to top it off the unused money in those plans can be passed on to heirs. They can’t have that!
But he prefers to tax it.
I'm stealing that...
“On the other hand, I don’t think proposal is going to go anywhere. The U.S. investment banking industry is probably gearing up its lobbying machine to quash it before it ever sees the light of day in Congress.’
Most Americans have no where near $3 million in IRA’s and 401K’s. To the average American a $3 million cap is going to seem extremely reasonable. When it fails to even get a vote in Congress, Obama and the press will portray its failure as one more example of mean spirited Republicans protecting the wealthy. This is all part of the PR campaign to spend and tax more.
This has about as much chance of passing as a monkey has of learning table manners.
It’s just more fodder for the base, the Lo-fos and the envious.
He can cram it. Hard and deep.
He is a socialist. He believes that if you have more than you need for today, you have too much and it should be redistributed. But not what HE has.
Life expectancy. Comrade, you’ve reach the age of 80. Time for you to go. Social Security and Medicare shouldn’t have to pay you for any more years. You don’t want to be greedy now, do you? After all it’s for the children and the planet.
WHo has the Apple ping list? Trying to find out about when the new iPad comes out.
I’ve heard all kinds of dates. Here is a sample from Macworld UK: Speculation regarding a new iPad 5 release date is rampant at the moment, but we do expect a new iPad 5 model to be released at some point in 2013.
What I’ve heard is the new iPad is supposed to be released in April but Apple hasn’t finished updating their OS 9.something which they don’t expect until this summer. I don’t know if the new iPad is contingent upon that software or if the software is supposed to be for their computers?
like his speeches, and books...GHOST WRITERS DO IT FOR HIM...
I just sent you a link that talks about that (I think they said iOS7) and gives April or May as a possibility.
ok... lets say there is a max...
and you use that 3 million to invest in something just doubles overnight to 6 million...
You know the answer...
Above ping list thread is from Sept 2006.
And I just located this:
Keyword: APPLE see below:
Back to topic:
FAMOUS ORIGINAL QUOTE:
I have only five words for you: From my cold, dead hands.
Charlton Heston (1923-2008)
U.S. actor and gun rights activist
May 19, 2001 speech at an NRA convention in Kansas City
The lies have been sold to the public so long and so well that it is very hard to break through that hardened shell of practiced ignorance with the truth.
My mother grew up during the FDR years and I had to tell her any number of time that there is no SS Trust Fund and there never was before I think she finally believed me. She also started listening to Mark Levin on the radio because it preceded her favorite show.
It is difficult to convince most people that people in authority are at least misleading them and most likely boldly lying about things that truly matter to their future wellbeing.
People by education and natural inclination will accept the word of their leaders unless or until personal experiences teach them otherwise. Once the barrier of trust is broken the truth becomes obvious.
There are those of course who are ideologs and see truth through that ideology. To them the truth is secondary, superfluous or a tool to the ends they seek.
The biggest impediment to getting people to see the truth about SS is that in this case to most people The Truth Will Set You Free is not they way they feel. People do not want to believe that their government can at any time pull SS out from under them. This is a truth that for many puts them at risk of poverty in their old age. For many people SS is a major part of their retirement plans. Telling these people that SS most likely will be broke before they retire is not a truth they want to hear and definitely not one they want to believe.
I have heard politicians on the Left and on the Right spout the pleasant to hear lie that SS is solvent and will be around for a long time to come. Most in government do not want the general population to know that the 15% of their income that has been deducted from their hard won earnings for many years has gone down the rabbit hole of wasted government spending and that they will never see it again. Such truth makes for angry voters.
That's exactly the point. I assume you were perfectly happy when the government "inserted itself into your personal life" by giving you the tax exemption for retirement plan contributions in the first place. All you're doing now is complaining that they've changed the terms, right?
You can still save for retirement, but you just can't deposit it into one of those 401(k) or IRA accounts as a tax-deferred contribution.
Not exactly re: tax exemptions. Clinton did away with that and you’re taxed on the money before hand. But I’m not going to argue the fine points of it.
“. . . keep in mind that some of the strongest opponents of this measure in both houses of Congress will be those from a place like New York (i.e., Democrats) where investment banking is a huge industry and a major employer.”
This is why I believe it is a nonstarter. The same holds true for “carried interest.” The Wall Street bankers, Buffett, Soros, and their toad Schumer are not going to allow any revenue enhancing measure to get into their pockets. This proposal is a diversion to get the conservatives and Republicans fighting something the Dems will never allow to pass anyway.
Contributions to most qualified retirement plans are not tax-exempt, they are tax-deferred. When you make a qualified contribution to one of those plans, you don't have to include the amount of the contribution in your taxable income for that year. That has been in place under the U.S. tax code since the 1970s, and it remains so to this day.
What changed during the Clinton administration was the introduction of a new kind of retirement plan where the contributions were not tax-deferred, but the withdrawals in retirement were tax-exempt. That's what the Roth IRA is.