Retirement Industry Looks Askance at $3 Million IRA Cap in Obama Budget
A budget deficit-cutting proposal from President Obama released Wednesday that calls for capping the value of individual retirement accounts at $3 million would significantly impact the growth of the retirement market in coming years, according to an analysis by Employee Benefit Research Institute.
Small business owners, a core customer for credit unions, would be significantly impacted by the proposal, according to Brian H. Graff, executive director and CEO of the American Society of Pension Professionals & Actuaries. He warned of the potential devastating impact if the proposal was enacted on small-business people.
“There should be no limit on the need that life insurance and annuities will address, so how can you limit the vehicles you use (such as IRAs) to address those needs?” Smith asked.
Smith “encouraged” Congress to carefully consider the negative consequences of arbitrary caps. “What may seem to be too much protection for some, will inevitably be too little protection for others,” he said.