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President Obamas 2016 proposed budget claims, among other goals, to help cut inefficient spending, reform the broken tax code, and to make sure everyone pays their fair share. These goals sound like really nobleobjectives Im all about limiting the size of government bycutting spending, revoking/refining the tax code, and I certainly dont mind paying my fair share as long as its being used wisely unfortunately the Presidents proposed budget falls woefully short and may actually do more harm than good when it comes to saving for retirement.

Taking a page out of the European socialism playbook, Obamas budget aims to remove some personal freedoms that we as Americans enjoy and have grown accustomed to. I wonder, in this day and age,are our founding fathers ideals antiquated so much so thatthis is how we should expect a modern society toact? To slowly turn over our hard-fought freedoms in return for a promise that politicians will protect us? That the government is the most efficient mechanism to spread wealth and raise the standard of living for all Americans?

I say nobecause history has proven thatthis is a slippery slope. Im a huge history buff and from my readingany civilization in World history that began to give up their personal freedoms and control to the ruling class of the time (Kings, Rulers, & in our case Washington D.C.) in the hopes of a more secure future, did so attheir own peril.

So, while the Presidents proposals are simply that, proposals, they speak to a deeper and potentially dangerous undercurrent that is being woven into our political and cultural consciousness. There are 3 specific provisions within Obamas budget proposal that highlightthe overarching goal of clawing backpersonal freedoms by limiting wealth accumulation and passing offamily legacies.

3 Attacks On Successful Savers

1) Limit OnRetirement Savings- the President proposes that if youve saved $3.4 million in retirement plans you have enough. If youve been successful, saved diligently, and invested wisely, you will be ineligible to contribute any more to your retirement plans, in effect, your retirement savings are capped. So does this mean that the IRS will be tasked with theresponsibility of enforcing yet another law, and creating more bureaucracy? Its fair to say that for many, $3.4 million is plenty to live on for the rest of your life, but what right does the Government have to say how much is too much? By capping the maximum that youre allowed to save in retirement plans, how exactly does that benefit Americans?

2) Forced Distributions on Roth IRAs amongthe many benefits of Roth IRAs is that they grow tax-free, are not taxed when you withdraw them, and RMDs (Require Minimum Distributions) are not required when you turn 70 1/2 like traditional IRAs. Obama is proposing that RMDs become required on Roth IRAs, so that when you turn 70 1/2 you will be forced to take distributions every year for the rest of your life. There isnt an economic benefit whatsoever for the Government to force RMDs on Roths, but if you read between the lines it appears that the President wishes to limit how much wealth is passed from one generation to the next, slowly eroding the value of the Roth for future generations. Should this proposal become law, it will actually make existing Roths more appealing because theres a good chance the current IRA rules will begrandfathered in, so perhaps you should take a second look at converting your IRA to Roth.

3) Destroying The Stretch under current IRS code, if your retirement accounts are designated properly, you may pass your IRAs and the like onto your spouse, then your children, and then grandchildren, thereby stretching the IRA over a few generations. The stretch IRA is a great way to spread the tax bill over a long period of time and keep more of your hard-earned money in your family where it was earnedand this is exactly what the President wants to change. His proposal includes a provision that any non-spouse beneficiary (like your children and loved ones) will be forced to pay income tax on and withdraw the entire balance of their inherited retirement account over a 5 year period. So, if you have a $500,000 IRA that you leave to your son or daughter they would be hit with a tax bill on $100,000 every year over 5 years, this is above and beyond the normal income taxes they pay and will likely push them into a higher tax bracket.

Obamasbudget claims to create a level and fair playing field for retirement savers, but is it the governments role to determine what is fair?Have our rights as Americans changed from Life, Liberty, and the Pursuit of Happiness to Life, Liberty, and the Pursuit of Limited Happiness as Defined by the U.S. Government?

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Obama Launches Attack On Successful Savers