The short answer to that question is yes. On April 10^th, President Obama released his Fiscal Year Budget proposals for 2014. One of the many tax changes proposed the in the budget focuses on limiting the size of individual retirement accounts, specifically targeting accounts with high balances.  

What type of individual retirement accounts are being targeted?

The account limit would apply to all “tax-preferred” retirement accounts. These accounts include Roth IRA’s, traditional IRA’s, defined benefit pensions, and 401(k)-type accounts. The limit would apply to the combined total of all “tax-preferred” accounts for taxpayers, not each individual account.

How would the retirement cap work?

Traditionally, retirement accounts have been capped on the front end by limiting annual contributions to 401k plans, IRA’s, etc. However, those contributions have been free to grow without being subject to any cap limitations and annual contributions can be made regardless of the value of the accounts. Obama’s proposal would cap retirement accounts with the annual contribution limits we are accustomed to, but also by limiting (or completely removing) the ability to contribute annually once the value of your retirement accounts reaches a specified balance.

How is the retirement limit calculated?

The retirement limit is not a flat $3 million for everyone. The retirement limits would be adjusted annually based on an actuarial calculation which takes into account your age and current interest rates at the end of the calendar year. For some perspective on how the calculation relates to your account balances and your age, the maximum retirement cap limit would be approximately $3.4 million for an individual age 62 and $1.0 million for an individual age 40 for 2013.

What would happen if my account went over the cap limit?

If your balances continue to grow well beyond the cap limit, there would be no change in the tax treatment of your earnings. However, once you exceed the cap in one year, you would not be allowed to make any additional contributions in the following year and beyond until the account balance fell under the determined cap.  Should your account balances ever drop back under the limit, you would be allowed to begin contributions again.

At this point it’s simply a proposal but certainly shows the intent to curb wealth accumulation in  retirement accounts.