Wyden Introduces Bill to Cap IRAs and 401(k)s at $10 Million for Americans Earning Over $400,000
Updated
Updated · USA TODAY · Aug 1
Wyden Introduces Bill to Cap IRAs and 401(k)s at $10 Million for Americans Earning Over $400,000
3 articles · Updated · USA TODAY · Aug 1
Summary
Sen. Ron Wyden and Rep. Richard Neal introduced legislation on July 22 that would bar further IRA contributions above $10 million for taxpayers earning more than $400,000 and force drawdowns of oversized accounts.
More than 32,000 taxpayers hold retirement accounts worth at least $10 million, bill sponsors say, with an average balance of $17 million; 208 taxpayers alone hold $85 billion, averaging $409 million each.
The push targets tax-sheltered wealth accumulation that critics say goes far beyond retirement saving, often through Roth IRAs that can turn tiny startup stakes into tax-free fortunes—Peter Thiel reportedly grew less than $2,000 into $5 billion.
Researchers across the ideological spectrum say retirement tax breaks skew heavily to higher earners: top-10% households had a median $559,000 in retirement savings in 2022, versus $39,000 for middle-income households, nearly half of whom had none.
Wyden's latest effort revives a proposal that has previously failed, but it lands amid a broader debate over whether tax incentives should be curtailed in favor of measures such as automatic enrollment and wider plan access.