272 / Biden 2025 Retirement Proposals

Originally Published on 4/4/24

President Biden’s 2025 budget proposal would limit taxpayers’ ability to accumulate excessive retirement account balances. It would require that taxpayers with at least $10 million (aggregate) in tax-preferred retirement accounts withdraw half the difference between their actual account balance and $10 million each year (for example, a taxpayer with a $12 million retirement account balance in 2025 would be required to take a $1 million withdrawal…if the balance in 2026 reached $11.5 million, a $750,000 withdrawal would be required that year, and so on). Taxpayers with retirement account balances of at least $20 million would be required to take a distribution to bring the account balance to $20 million or less. The new withdrawal rules would only apply to taxpayers with earnings of at least $400,000 for the year ($450,000 for married couples).

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about President Biden’s proposals to limit the value of retirement accounts for high-income taxpayers.

Below is a summary of the debate that ensued between the two professors.