A Twitter debate kicked into high gear after House Ways and Means Committee Chairman Richard Neal, D-Mass., said his committee is mulling legislation to limit "the total amount of money that can be saved in tax-preferred retirement accounts."
Neal told ThinkAdvisor that such a bill would put "an end to the tax dodging some do when saving in IRAs," and that "incentives in our tax code that help Americans save for retirement were never intended to enable a tax shelter for the ultra-wealthy."
He referred to a recent ProPublica report revealing that tech mogul Peter Thiel has amassed $5 billion in a Roth IRA that he had used to invest in a nascent PayPal.
The Ways and Means Committee, Neal said, "is working on legislation that will stop IRAs from being exploited."
Jeff Levine, chief planning officer at Buckingham Wealth Partners, proposed in a tweet a "very simple and fair solution" to Neal's plan: "Pick a dollar amount. Make it high. Very high. Maybe $10MM to start and adjust it for inflation. Rule: If your Roth > $10MM on 12/31, the excess becomes an RMD next year. $10MM should cover RETIREMENT expenses."
