Proposed cap could have cumulative impact on retirement balances

08/29/2013 | ThinkAdvisor

The administration's 2014 budget plan to cap tax-deferred savings in retirement plans to between $2.3 million and $3.4 million will affect plan balances over time, according to the Employee Benefit Research Institute. The cap would take effect in tax year 2014 if enacted and is tied to maximum allowed annuity amounts in tax-qualified plans. The study found that the maximum allowed accumulation would be reduced using a higher discount rate to measure future cash flow, which could come into play if the Federal Reserve eases current monetary policies.

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