robnplunder
Thinks s/he gets paid by the post
At the 6% or 8% discount level I'd have already hit the cap. If I had continued working I'd be very close to 4% cap. Why should I be penalized on my employers 401K matching fund, or a pension benefit just because I was good saver and investor.
200K is a lot money to spend by most board members standards, but not necessarily in high cost of living place like the SF Bay Area, or NYC, or Honolulu. I suspect many of us know families making 300,400,500K and spending most all of it, who's sole saving are in 401Ks, or pension plans.
As Table 2 in the PDF shows the amount of money at a given age you can save is highly dependent on the discount rate. In a more normal interest rate environment this rate would fluctuate with the business cycle, thus causing people to have to cut saving during boom times,and allow them to save more recession. Which of course is completely the opposite of what we want high earner to do during a business cycle.
I don't see it as penalizing anyone. I see it as plugging a loophole for a program that is intended for a specific purpose. People can still save using other traditional means to build up their wealth.