Financial advisors just won’t stay down.
The Obama Administration thinks $3.4 million is more than enough for any one individual to accumulate tax free, and said as much in its recent budget proposal. The reasoning behind that is “a worker’s total account balance would be limited to the amount needed by a 62-year-old to buy an annuity generating an annual payment of $205,000,” according to The Wall Street Journal’s Kelly Greene.
The response was predictable outrage, most of which centered on the very obvious point that with entitlement spending already out of control, a top-heavy generational issue with boomers in retirement, and images of a broke Spain and burning Greece, is a disincentive to save really the best course of action?
“Curbing the growth of retirement plans in a nation where 91% have less than $100k saved is insanely ignorant,” financial planner Rick Kahler tweeted.
Unintended consequences are rarely considered when politicians are looking to do good. I hope further reflection will result in this proposal going the same way as the ill-conceived 1099 rule for purchases over $600—which is to say dropped and forgotten.