Monday, April 15, 2013

President Obama's 2014 Budget Proposal Would Begin Taxing Your Retirement Accounts

President Obama's proposed federal budget for fiscal year 2014, released in April, would cap tax-advantaged retirement savings for individuals at just over $3 million next year. The asministration estimates that the limit on tax-preferred accounts would confiscate an additional $9 billion of workers earnings over 10 years.

President Obama seeks to limit the deduction for contributions to 401(k) and 403(b)-type defined contribution plans, defined benefit pension plans, and individual retirement accounts (IRAs) for an individual who has total balances or accrued benefits under those plans that are sufficient to provide an annual income of approximately $200,000 commencing at age 62. The proposal would be effective for taxable years beginning after Dec. 31, 2013.