H.R. 9813 imposes new restrictions on retirement savings for wealthy Americans, targeting high-income taxpayers with substantial retirement account balances. The bill caps annual contributions to retirement plans at $10 million minus existing balances for individuals earning over $400,000-$450,000 annually (depending on filing status), with a 20% tax penalty on excess contributions. Beginning in 2034, affected taxpayers with combined retirement account balances exceeding a set threshold must take increased mandatory distributions—withdrawing 50% of amounts above the threshold, or 100% if they hold significant Roth accounts—and face a 37% withholding tax on these distributions. The legislation exempts employer contributions, inherited accounts, and rollovers from the contribution limits while requiring retirement plans to facilitate the mandated withdrawals without allowing them to be rolled back into other retirement accounts.
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