As expected, the White House budget calls for legislation that would prohibit individuals from accumulating more than $3 million in individual retirement accounts and other tax-preferred defined contribution retirement accounts, such as 401(k)s. With the release of the full budget details April 10, it became clear the proposed cap would...
By Designed by Joe Schlue|June 03, 2013 at 08:00 PM|The original version of this story was published on Benefitspro Magazine
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The applicable text, found on page 33 of theWhite House budget proposal:
“Limit the total accrual of tax-favored retirement benefits.—The Administration proposes to limit the deduction or exclusion for contributions to defined contribution plans, defined benefit plans, or IRAs for an individual who has total balances or accrued benefits under those plans that are sufficient to provide an annuity equal to the maximum allowable defined benefit plan benefit. This maximum, currently an annual benefit of $205,000 payable in the form of a joint and survivor benefit commencing at age 62, is indexed for inflation, and the maximum accumulation that would apply for an individual at age 62 is approximately $3.4 million. The proposal would be effective for taxable years beginning after December 31, 2013.”
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