Fundsters interested in the 401(k) channel, take heed. U.S. President Barack Obama just proposed two new limits on the retirement savings plans and on IRAs.
On Wednesday the White House released
its fiscal 2014 budget proposal
for the federal government, complete with two proposed restrictions on 401(k)s and other retirement savings accounts. The Wall Street Journal
and the ICI
, among others, have rushed to defend 401(k)s and question the proposals.
One proposal would cap an individual's total retirement savings account balance (across all accounts) to the amount needed to buy a $205,000 per year annuity, which currently costs about $3 million. The other idea would cap all itemized deductions (which includes retirement plan contributions as well as mortgage interest payments, charitable contributions, and employer sponsored health insurance, among others) to 28 percent of income for high earners.
"Amazingly, Mr. Obama has surveyed the economic landscape and somehow decided that it's time to discourage savings if you make more than he thinks is 'reasonable,'" the WSJ
For more on the proposals, see our sister publication, 401kWire
Neil Anderson, Managing Editor
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