Obama attacks IRAs

How much would you need to be able to retire comfortably? If you’re not sure of the answer, don’t worry: the Obama administration will answer for you.

President Obama’s FY 20414 budget will be released on Wednesday — two months later than the legal deadline. But thanks to administration leaks, too conveniently released just hours before last Friday’s horrendous employment report, we have some idea what it will contain.

Most of the Obama budget will be the same tiresome mix of higher taxes, higher spending, and budgetary gimmicks that would land any private sector CFO in jail.

Despite the larger fiscal impact of other provisions of the Obama budget, it is hard to match the audacity, paternalism, and economic idiocy of Obama’s plan to limit individual retirement accounts to a maximum of $3 million.

What we know so far offers more questions than answers; the answers we have already are bad and the questions even worse.

Please read the entirety of my article for the American Spectator here:

  • airbus
    Comment from: airbus
    04/10/13 @ 05:56:54 pm

    Eventually, you could substitute retirement with the size of a home. They may tell you a studio apartment is enough, in an area close to light rail, instead of keeping your large home in Winter Park. We're already approaching that point with the size and type of car you can buy. I was never a fan of caps on IRA type accounts. I always felt that if you were able, you should be allowed to put as much in those as you could possibly afford. Obama is already on record saying that there is a figure where you've earned enough per year.

  • gstaff
    Comment from: gstaff
    04/16/13 @ 12:11:13 pm

    I am against this in the strongest possible terms, but I did run the numbers to see how long one could get $205,000 a year out of a $3.2MM nest egg at "current" interest rates. If you start with $3.2MM and withdraw $17,083 at the beginning of each month ($205K/yr), and earn 4.5%/yr applied monthly (0.38%/mo), and assume a 25% tax rate on the interest, the nest egg will last about 265 months. A man's life expectancy at age 62 is about 20 years, so yes, the nest egg is sufficient to last nearly everyone as long as would be required. I am not defending the idea. It smacks of governmental peternalism of the worse sort, and, like all class attacks, does nothing to better the plight of the "poor." It is idiocy in its most pure form. But I thought the numbers would be interesting to know, in case the argument arose. By the way, I currently have about half of my retirement in Allianz inusrance investments that guarantee more than the 4.5% mentioned above, sothe interest rate is achievable. The 7% that was mentioned that would be required seemed to assume that the nestegg would attract no interest while it was being drawn down.

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