The Problem With Obama's Plan to Limit Retirement Savings

The administration's plan to cap retirement saving at about $3 million adds a new layer of complication and little benefit

The $3 million-per-person retirement cap will initially impact only a rarefied population.
Photographer: Tim Klein/Gallery Stock

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By Allison Schrager

February 2, 2015 at 2:15 PM UTC

This article is for subscribers only.

The White House releases its 2016 budget today, and among other initiatives aimed at raising tax revenue from the richest of the rich, the Obama administration is proposing a cap on how much money a person can have in all of her retirement accounts combined. It suggests a ceiling of more than $3 million per person.

The vast majority of Americans will only ever dream of such a well-padded retirement. Even most of the rich wouldn't hit Obama's cap. In 2011, only one out of every 1,000 Americans had more than $3 million in their retirement accounts, according to the Employee Benefit Research Institute. But it's not clear how that number will change in the future.