President Obama's budget proposal includes a big fat surprise for Americans: a limit on what Americans are "allowed" to save in their retirement accounts. This incredible violation of individual rights must be a joke or a misprint.
Ben White from Politico breaks the news in their Morning Money tip sheet. Regarding the budget plan, the claim that Obama plans to "cut" Social Security at great political risk is repeated, despite the fact that there are no cuts proposed; only a reduction of the rate of growth from 6.1 percent to 5.9 percent over a ten-year period (which is also not the right solution, considering the massive inflation that will eventually catch up with Americans).
Also buried in the article is a curious sentence:
"The budget will include a new proposal that prohibits individuals from accumulating over $3 million in IRAs and other tax-preferred retirement accounts."
Say What? The article continues, "Under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving." It is enough to make one's head explode. Who is the government to decide how much an individual is allowed to accrue over a lifetime? The article says:
"The budget would limit an individual's 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."
So what happens if someone accrues more than their silly little limit? When did America become the Taliban? This cannot be accurate. A late April Fool's day joke, perhaps? Perhaps this author is missing something about this budget proposal?
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