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The easiest solution is to cap at a maximum value for Roth (post-tax) purposes. Pick a number ($50M, $100M, $200M), and anything over gets taxed at traditional
by nomoreplease 5y ago
The easiest solution is to cap at a maximum value for Roth (post-tax) purposes. Pick a number ($50M, $100M, $200M), and anything over gets taxed at traditional rates. You can only put in $6,000USD/year into an IRA, so it's absurd for anyone to pretend a return of $1B USD+ is acceptable.
$6k/yr for 30 years at a very-high interest rate of 15% results in $31.3M .. so capping Roth-value at $50M will prevent extreme abuse. Though, I suspect many will argue for a lower cap
- Moodles 5y agoI think the UK has a similar policy with pensions with a cap around £1m. Not saying it's a good or bad idea as I really havn't studied the economics of it, but other countries definitely do it. Though a UK pension is more like a 401(k) (pre tax) than a Roth (after tax).