President Obama’s understanding of financial planning is fundamentally flawed. In his latest budget, the chief executive proposed a cap on tax-preferred retirement accounts. An individual’s total balance could not accumulate over $3 million. This total would include the sum balances of a traditional IRA, Roth IRA, 401(k) and defined contribution plans.
Obama justified his budget by saying, “Tax-preferred savings vehicles are intended to help middle class families save for retirement. But under current rules, some wealthy individuals are able to accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”