What is the “reasonable” level? It is easy just read how they determine that. They say they want to “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 of retirement.” Easy as pie to understand. What do you mean you read it three times and don’t have a clue? What do you mean the person who wrote that should be hung by their thumbs until they beg for mercy? Oh and by the way – that calculation has to be redone every year. Only government wonk attorneys who never had a real job could come up with such garbage.
This is all to stop “rich” people from accumulating too much money in their retirement plans.
But is that not what the limits of $5,000 or $17,500 for 401 (k) plans or $50,000 in your SEP/IRA are for? Is this really punishing the rich?
Let’s say you are a mid-level manager at a company. You make a nice living of $85,000 per year and you participate in your company’s 401 (k) plan. You put in $8,000 and your company puts in $2,000 of matching funds. You direct the people who invest the funds to buy your company’s stock. You have done that for the last 15 years. Your work at Google or Wal-Mart or Microsoft and your pension is now worth $8,000,000. You are now going to be penalized because you went to work for a company that has been successful and you bought their stock in your pension plan?
That story has happened thousands of times. And it could happen just as often to a mid-level employee as a highly paid employee because there are contribution limits. Yet, Obama wants to punish you. He would rather continue the lie about the financial viability of Social Security and discourage Americans from contributing to their self-funded, limited-contribution pension plans.
This is just more evidence our President has no clue about private industry. He wants to limit what you can have in your pension to pay for the excessive pensions of government employees that are funded with little or no money from their own pockets.
This limitation on pensions will probably not see the light of day in the final budget for 2014. But this is just the beginning of the war to enact this idea. Remember these people will come up with any scheme and rationalize it to increase taxes. This is just another fine example of their conniving minds.