Roth While You Can
NEWS OF ENTREPRENEUR Peter Thiel’s $5 billion Roth account, which was funded with PayPal stock, has motivated Congress to look at restricting the growth and size of Roth accounts.
There’s talk of limiting Roth account balances to $5 million or $10 million. There are also proposals to limit both backdoor IRA conversions and so-called mega-backdoor conversions. The latter involves funding a nondeductible401(k) and then immediately converting the money to a Roth. There’s even discussion of not allowing high-income workers to convert traditional IRAs to Roth accounts.
In recent years, Congress has nixed Social Security’s file-and-suspend option and compelled beneficiaries to empty inherited IRAs within 10 years, rather than over their lifetime. But both changes were grandfathered, meaning those already using the file-and-suspend strategy and those who already had inherited IRAs weren’t affected. Presumably, it would be a similar situation with existing Roth accounts. The upshot: If Congress limits the ability to take advantage of Roth accounts in future, it makes even more sense to convert to a Roth today, while the door is still open.
Source: Roth While You Can – HumbleDollar
QUINNSCOMMENTARY 
I keep saying all the rhetoric about the “billionaires who don’t pay their ‘fair share’ of taxes” is simply a smoke screen to mask the lust for the money growing in retirement accounts. The government seems truly vexed in its desire to motivate people to save for retirement on the one hand, and the growing pile of money earmarked for retirement sitting out of reach of the IRS.
LikeLike
Has anyone heard what Peter Thiel is planning to do with his Roth IRA?
LikeLike
Another consideration is that congress could add the required minimum distributions to Roth IRA. This was considered a few years back but never materialized.
LikeLike
For a government that is forcing employers to make you save for retirement while at the same time they are refusing to fix social security while tempting to expand it, this should not be a surprise. I had always feared that the government would change the rules for Roth IRAs. The real crime will be if they tax the withdraws as ordinary income like a standard IRA or 401K instead at the long term capital gains rate. Never underestimate the government thrist for your money.
I am not sure how a high wage earner can contribute enough money that it grows to $5 billion. But what if my IRA hold several shares of Microsoft and Amazon from their early days? Is it my fault that I would have gotten stupidity lucky and rich?
If this passes, it will be another excuse for those who do not save for retirement now. The government will change the rules and tax your money so why save.
I have alway said, if your crystal ball did not work right in your retirement planning, paying taxes is a good problem to have since that will mean you probably have enough money to live.
LikeLike