No. of Recommendations: 4
If you look at how the cap is figured (and thus what it would generate) it is based on the current historically low interest rates. Yes today the cap is $3.4 mil, but let interest rates get back to normal, the cap could easily be $1 mil.

I saw how it was figured and the assumptions thereof, where do your calculations put rates in order for it to fall to $40K?

What would that then generate, $40k? Which is what, the average income for the US (at least according to 2012 data).

Middle class enough for you?

Yup. Although - as previously stated in this thread - with a (likely) paid off house, Medicare, maybe a pension and/or Social Security, sure, middle class. Probably upper middle class.

Be careful of unintended consequences. So lets assume normal rates and a $1 mil cap. A young person starting out happens to buy the next Apple, Netflix, of Tesla and is soon at the cap limit. So now they have to invest outside of a tax deferred account. Ok, no big deal, but now they are paying taxes, at a high rate. Is that a good thing?

I don't know, is that actually how this proposed cap is suposed to work? If so please post the link. I'll gladldy read through it and then respond.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.