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re: Would waiving penalties and taxes on 401(k) withdrawals help the middle class?
Posted on 3/23/20 at 10:21 am to boosiebadazz
Posted on 3/23/20 at 10:21 am to boosiebadazz
No. For starters this is a terrible time to take money out. All 401Ks are bleeding right now. But you only realize that loss if you get your money out now. Also, if they let folks take out their 401K there will be a bank run that will make 1929 look puny in comparison.
0
Posted on 3/23/20 at 10:21 am to Smeg
quote:
With the market down like it is, you're already taking a loss if you take anything out, even without penalties and taxes.
Why? you could buy back the exact same thing at the same price and have it tax free in a Roth.
Please Mr. FedGov, dont throw me in that briar patch.
Posted on 3/23/20 at 10:26 am to boosiebadazz
I’m glad you aren’t in charge, you have some dumb ideas!
Posted on 3/23/20 at 10:27 am to boosiebadazz
worst thing you could do.
they would desperately be selling at the low, crippling themselves for the future.
they would desperately be selling at the low, crippling themselves for the future.
Posted on 3/23/20 at 10:28 am to boosiebadazz
Not politically feasible because democrats are disgusting. (Tax break for the rich)
Posted on 3/23/20 at 10:29 am to The Maj
quote:
Why would anyone want to withdraw their 401(k) right now? This should not be encouraged in any manner...
The Maj and I rarely agree on something, but cashing out your IRA would just encourage a run on the stock market and cause a huge section of the country to sell, plummeting stocks.
This post was edited on 3/23/20 at 10:30 am
Posted on 3/23/20 at 10:33 am to SlowFlowPro
quote:
i seriously doubt many can go 3+ months without income without dipping into investments
they are not going to go 3 months without some sort of assistance or income...
Posted on 3/23/20 at 10:37 am to The Maj
quote:
they are not going to go 3 months without some sort of assistance or income...
the plan in place will restrict income
where do you think we'll get the trillions necessary to replace that income?
Posted on 3/23/20 at 10:45 am to udtiger
I didn’t ask whether you personally would or should. I asked if it made sense from a policy perspective. I’d argue you’re actually penalizing the responsible ones who saved if you go this route and exclude them from the stimulus handout. But it would cause major belt-tightening. You could even utilize it as an SIR. You’ve gotta use first 15-20 k from your 401k, penalty and tax free, and then the government will help.
If it shaves 500 billion or so off this stimulus bill, is it worth it?
If it shaves 500 billion or so off this stimulus bill, is it worth it?
This post was edited on 3/23/20 at 10:46 am
Posted on 3/23/20 at 10:48 am to boosiebadazz
quote:
it shaves 500 billion or so off this stimulus bill, is it worth it?
At what cost to the stock market cap due to panic selling?
Posted on 3/23/20 at 10:54 am to lsu777
quote:
Here is an idea,How about they stop collecting payroll taxes like trump suggested?
It just makes too much god damn sense....I mean why not do that and give 1200 checks to everyone that makes under 40K/year.
Posted on 3/23/20 at 10:55 am to Auburn80
quote:
This would be awesome for me. Take the entire 401K and immediately roll it over to a Roth so it would be tax free forever. Who wouldn't do this?
Unless they've changed Roth contribution limits you're only allowed $7k per year or less depending on your age. I believe If you contribute before the end of March you could also add 2019 as a contribution if you didn't already make the 2019 contribution.
Posted on 3/23/20 at 10:56 am to Bass Tiger
quote:
Unless they've changed Roth contribution limits you're only allowed $7k per year or less depending on your age.
What he's describing wouldn't be a contribution.
It also wouldn't be an option because hardship withdrawals are not rollover eligible (if you can afford to roll it over, you aren't in enough hardship to take it).
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