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Started By
Message
Secure Act 2.0 some discussion of Emergency Saving - seems in adequate
Posted on 7/31/22 at 10:59 am
Posted on 7/31/22 at 10:59 am
CNBC - Emergency Savings
So the point of emergency saving is to prevent people raiding 401k but $2,500 seems too small. 10% penalty is unnecessary to me. I guess trying to force people to save but seems like a small amount
I think having emergency fund account and giving tax break for maintaining certain level would be interesting
So the point of emergency saving is to prevent people raiding 401k but $2,500 seems too small. 10% penalty is unnecessary to me. I guess trying to force people to save but seems like a small amount
I think having emergency fund account and giving tax break for maintaining certain level would be interesting
quote:
Workers would be able to save up to $2,500 in the account, and any excess contributions would automatically go to a linked 401(k) plan account at the company.
quote:
The other Senate proposal takes a different approach: It would let workers withdraw up to $1,000 from their 401(k) or individual retirement account to cover emergency expenses without having to pay the typical 10% tax penalty for early withdrawal if they are under age 59½.
This post was edited on 7/31/22 at 11:08 am
2
Posted on 7/31/22 at 11:07 am to thelawnwranglers
So employers will opt employees into the plan and the employees who don’t have a savings will turn around and opt out. Brilliant.
By and large, people who don’t have an emergency savings are actively trying not to have one. It’s not like they’re unaware they should have some money saved for emergencies.
By and large, people who don’t have an emergency savings are actively trying not to have one. It’s not like they’re unaware they should have some money saved for emergencies.
Posted on 7/31/22 at 11:11 am to slackster
quote:
So employers will opt employees into the plan and the employees who don’t have a savings will turn around and opt out. Brilliant.
Which honestly if your company matches why wouldn't you do this pay 10% penalty and profit.
Also I love question how many are comfortable with savings. Me being comfortable doesn't mean I should be.
I probably have more then average but think my cash balance is too low
Posted on 7/31/22 at 11:17 am to thelawnwranglers
I like that first option, but doubt many people who don’t have emergency savings would take advantage. Financial competency is hard for a lot of people apparently. The nice part is the bar is so low to get ahead of others and move up if you are competent
Posted on 7/31/22 at 11:25 am to Upperdecker
I don't like forced default contribution going to be nightmare for payroll
Posted on 7/31/22 at 11:25 am to slackster
Legislating personal responsibility is kind of an oxymoron, isn’t it?
Wouldn’t want to focus on educating people on finances, let’s just forgive some loans and auto-enroll them and everything will turn out ok!
(Actually auto-enroll 401k works really well as a feature)
Wouldn’t want to focus on educating people on finances, let’s just forgive some loans and auto-enroll them and everything will turn out ok!
(Actually auto-enroll 401k works really well as a feature)
Posted on 7/31/22 at 11:50 am to UpstairsComputer
quote:
Actually auto-enroll 401k works really well as a feature)
Yeah, but you can’t really use those funds without a qualifying event. Alternatively, the “emergency savings” option doesn’t seem like you’ll have to prove anything to use it. People will just draft from it at will.
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