Obama’s proposed (and hopefully soon to be disposed) budget informs us that some people are saving ‘more than is needed’ for their post-employment future. Naturally the President generously offers to relieve these people of that burden.
According to advance reports, the administration’s budget due out on Wednesday will propose a cap limiting the amount of annual return a retirement account can create to $205,000. If that proposal were enacted today, that would mean retirement accounts would be limited to $3 million in assets. The White House estimates that caps on the tax-preferred accounts would generate $9 billion over 10 years.
According to a new analysis from the Employee Benefit Research Institute, only around 0.06 percent of total IRA account holders had $3 million as of the end of 2011, and 0.0041 percent of 401(k) accounts had $3 million as of the end of 2012.
“I think a lot of what people are missing about this is this is most likely going to be very, very difficult from an administrative complexity standpoint for employers to deal with this,” says Jack VanDerhei, research director at EPRI.
That’s a no squidder. But there’s a simple solution. Create a federal bureaucracy to handle the problem! And once the American sheeple get used to the idea that the government can take care of our retirement accounts, it would be unfair to limit that care to the wealthy. Lower the upper limits gradually so that the middle class and then everybody can share in the wonderful Centralized Retirement Assistance Plan (CRAP). They’ve done so well with Social Security, after all.