A bill to amend the Internal Revenue Code of 1986 to impose limitations on high-income taxpayers with large retirement account balances.

Sponsor: Ron Wyden (Democratic-OR)July 21, 2026

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Introduced

In Committee

Passed One Chamber

Passed Both Chambers

Signed into Law

Read twice and referred to the Committee on Finance.

Caps retirement account contributions and increases withdrawals for high-income earners with over $10 million saved.

This bill would limit how much high-income individuals can put into their individual retirement plans if they already have more than $10 million saved. These changes would affect taxpayers earning over $400,000 (or $450,000 for joint filers). They would start in 2027 for contributions and 2034 for withdrawals.

What Would Change

Today, there are no specific limits on individual retirement plan contributions or increased mandatory withdrawals based solely on a person's high income and large total retirement savings. This bill would change that. It would limit contributions to individual retirement plans for high-income taxpayers to the amount needed to bring their total retirement savings across all accounts up to $10 million. If their total savings already exceed $10 million, no further contributions to individual retirement plans would be allowed, starting in 2027. The bill would also require them to withdraw more money from these accounts each year, starting in 2034.

Key Provisions

Limits how much high-income taxpayers can add to individual retirement plans. Contributions would be capped at the amount needed to bring their total retirement savings across all accounts up to $10 million. If their total savings already exceed $10 million, no further contributions to individual retirement plans would be allowed, starting in 2027.
Increases the amount high-income taxpayers with over $10 million in retirement savings must withdraw each year, starting in 2034.
Requires retirement plans to let these taxpayers take out money to meet the new withdrawal rules, starting in 2034.
Exempts these specific mandatory withdrawals from the 10 percent additional tax on early distributions.
Sets a 37 percent withholding rate for these specific mandatory withdrawals, except for qualified Roth distributions.

View on Congress.gov

S 5040 · 119th Congress · July 21, 2026 · AI Summary by gemini-2.5-flash · 9/10

A bill to amend the Internal Revenue Code of 1986 to impose limitations on high-income taxpayers with large retirement account balances.

What Would Change

Key Provisions

Lobbying Activity