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Hope you don't plan on having more than $3M in your IRA's

nehalem256

Lifer
Apr 13, 2012
15,670
6
0
Contributions are limited to what $17,000/year.

40 years of contributions at the max us $680,000. Obviously hopefully you would have more due to investment gains.

IRAs are intended to be a way for normal people to save for retirement. Not a way to hide money from fair taxation.

One accountant told Bloomberg that the wealthy are using retirement accounts to pass money to heirs in a tax-friendly way.
Are you saying there shouldn't be any limit?

EDIT: Oops I appear to have confused IRA with 401K. Whatever, I think you can roll over a 401K into an IRA.
 
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Theb

Diamond Member
Feb 28, 2006
3,534
8
76
A White House official put it this way to Politico: Obama's proposal caps retirement accounts at an amount that would provide someone about $205,000 per year in retirement.

You could put as much as you want in your Wells Fargo (WFC) savings account or other accounts. It's just the tax-favored retirement accounts that are being scrutinized here.
I'm ok with this.
 

bignateyk

Lifer
Apr 22, 2002
11,290
6
0
404: Problem not found

They are talking about tax-favored accounts, which were created to help your average person save for retirement.
 

thraashman

Lifer
Apr 10, 2000
10,898
1,042
126
This is one of the few tax proposals that won't screw the middle class and will make the top 1% actually pay taxes the way the rest of us do. I like it.
 

Texashiker

Lifer
Dec 18, 2010
18,812
192
106
Just another way to keep the poor poor and the rich rich.

Instead of being able to leave real wealth to the next generation, the government is going to cap how much someone can save.
 

mshan

Diamond Member
Nov 16, 2004
7,869
0
71
"Mysteries also arise when one looks at Romney’s individual retirement account at Bain Capital. When Romney was there, from 1984 to 1999, taxpayers were allowed to put just $2,000 per year into an I.R.A., and $30,000 annually into a different kind of plan he may have used. Given these annual contribution ceilings, how can his I.R.A. possibly contain up to $102 million, as his financial disclosures now suggest?"
http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts
 

ivwshane

Lifer
May 15, 2000
28,182
7,997
136
Just another way to keep the poor poor and the rich rich.

Instead of being able to leave real wealth to the next generation, the government is going to cap how much someone can save.
I don't think you read the same article I did.

You could put as much as you want in your Wells Fargo (WFC) savings account or other accounts. It's just the tax-favored retirement accounts that are being scrutinized here.

As it stands, some retirement accounts are so loaded that people are using them more for estate planning. One accountant told Bloomberg that the wealthy are using retirement accounts to pass money to heirs in a tax-friendly way.
 

Dr. Detroit

Diamond Member
Sep 25, 2004
7,493
187
106
If you are self employed - you can put in Up to 25% of your income totaling a maximum of $49,500 per year under SEP- IRA guidelines.

401K limit is $17,500 this year. You can have a SEP-IRA + 401K. So maximum would be almost $70K a year.

This is BS - Here is a novel idea - the Govt needs to stop spending so damn much money and decrease the level of entitlements. The incentives to work hard are being taken away.

39% Fed + 10.5% CA + every other tax = more than 50% goes to the Govt. Not a lot of incentive for folks who are hovering at $450,000 in income to work for that last $50K or $100K. They will just fire an employee or two and take more vacation rather than give 55%+ to the Govt.
 

Dr. Detroit

Diamond Member
Sep 25, 2004
7,493
187
106
And why is the private sector employees like Firefighters & Police Officer & City Executives allowed to have tax payer funded $225K retirements but us folks are not.


This is insane!
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,916
172
106
One accountant told Bloomberg that the wealthy are using retirement accounts to pass money to heirs in a tax-friendly way.
IIDK what he's referring to, or if he's correct, but if so that should be fixed. A retirement account shouldn't be turned into an estate tax dodge. We already have too many holes in the estate tax that the very wealthy take advantage of.
------------

We've tried this once before. For some reason it didn't work well, or for some reason I can't remember, but it was repealed. That was back in the late 1980s or early 1990s.


"Mysteries also arise when one looks at Romney’s individual retirement account at Bain Capital. When Romney was there, from 1984 to 1999, taxpayers were allowed to put just $2,000 per year into an I.R.A., and $30,000 annually into a different kind of plan he may have used. Given these annual contribution ceilings, how can his I.R.A. possibly contain up to $102 million, as his financial disclosures now suggest?"
http://www.vanityfair.com/politics/2012/08/investigating-mitt-romney-offshore-accounts
Bain was very successful buying near-bankrupt companies and turning them around. He likely bought his share of equity from those companies from his IRA.

And that illustrates why IRSs aren't the big money loser for the govt some seem to think. Putting good LT cap gain investments into an IRA converts lower taxed LTCG into higher taxed ordinary income subject to the highest rate.

Fern
 

Slew Foot

Lifer
Sep 22, 2005
12,387
94
86
39% Fed + 10.5% CA + every other tax = more than 50% goes to the Govt. Not a lot of incentive for folks who are hovering at $450,000 in income to work for that last $50K or $100K. They will just fire an employee or two and take more vacation rather than give 55%+ to the Govt.

Ding ding ding. I shut down my clinic in the middle of November and make all the employees take 6 weeks off. If you need healthcare then, go somewhere else.
 

Lithium381

Lifer
May 12, 2001
12,464
2
0
I can see imposing NEW laws applying to new investors under the age of maybe 40, but to penalize those with 3mil+ is not fair. Had they known there was a cap at 3mil they'd have probably spent it differently . . . now they get hit either way. The people who were responsible in saving money and sacraficing their day to day when they were young are now hit with this? BS!!!! While those who DIDn"T save up live off the state. . . . disgusting

Obama is essentially asking people this: How much do you really need for retirement?
i'm honestly getting sick and tired of the government trying to decide what i need. How much money for retirement. How much sugar in my soda. how many bullets in my magazine...... fsck!
 

mshan

Diamond Member
Nov 16, 2004
7,869
0
71
I suspect this is a way of closing loopholes of the super rich, like Romney's last ditch proposal to cap all tax deductions at $25,000 total.
 

werepossum

Elite Member
Jul 10, 2006
29,876
460
126
One step closer to Cyprus. And you idiots thought it wouldnt happen here.
Hey - I NEVER thought it wouldn't happen here. On the contrary, I think it's inevitable.

I can see imposing NEW laws applying to new investors under the age of maybe 40, but to penalize those with 3mil+ is not fair. Had they known there was a cap at 3mil they'd have probably spent it differently . . . now they get hit either way. The people who were responsible in saving money and sacraficing their day to day when they were young are now hit with this? BS!!!! While those who DIDn"T save up live off the state. . . . disgusting

i'm honestly getting sick and tired of the government trying to decide what i need. How much money for retirement. How much sugar in my soda. how many bullets in my magazine...... fsck!
Just another step in the left's playbook.
1. We decide how much of X you need.
2. We make sure you don't have more than that.
3. We make sure that any "excess" is properly distributed.

The beauty of the system is that it works for literally everything.
 

Midwayman

Diamond Member
Jan 28, 2000
5,637
270
126
Its not like 3million is that much in a retirement account, especially not if there aren't plans to keep it current with inflation. Especially so with increasing life expectancy.
 

crownjules

Diamond Member
Jul 7, 2005
4,860
0
71
It's a government allowed investment type. Not seeing the outrage here. They can adjust the rules as they see fit if they feel it's being exploited. They're not saying "you only need X to retire." They're saying "You only need X in our tax sheltered accounts. The rest of your retirement savings can be taxed at nominal rates in regular accounts."

Not seeing the Cyprus correlation at all.
 

Dr. Detroit

Diamond Member
Sep 25, 2004
7,493
187
106
Its not like 3million is that much in a retirement account, especially not if there aren't plans to keep it current with inflation. Especially so with increasing life expectancy.
The Govt & IRS ignores inflation - How about that AMT folks.

Absolutely disgusting the middle class are battling AMT every year when it was never designed to do that - now its just another revenue source.

There will be no tax reform - just more taxes.
 

nehalem256

Lifer
Apr 13, 2012
15,670
6
0
The Govt & IRS ignores inflation - How about that AMT folks.

Absolutely disgusting the middle class are battling AMT every year when it was never designed to do that - now its just another revenue source.

There will be no tax reform - just more taxes.
Actually that is false. Which is why 401K and IRA contribution limits are periodically increased.
 

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