The President's recent budget proposal would impose a new
cap on tax-favored retirement benefits.
Annual contributions and accruals under tax-favored plans are
already limited, but this would be a complex new limit determined
by how much of a pension could be provided by your IRA and your
401(k) accounts and qualified pension plans of ALL of your
employers. To the extent you exceeded the amount necessary to fund
the maximum annuity in a qualified pension plan, which the budget
proposal estimates at approximately $3.4 million today, you would
be barred from making any additional contributions or earning any
additional benefits.
The proposal may have been a reaction to the huge IRA
accumulations Mitt Romney revealed during the election campaign. In
fact, Treasury's Undersecretary for Domestic Finance, Mary John
Miller, recently stated that the proposal would affect only a
fraction of 1% of the country. However, this ignores the
"trickle down" realities of retirement
