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Posted: 9/29/2011 4:43:37 AM EST

401(k) Tax Changes May Be On Fast Track

Joe Mont

09/23/11 - 11:32 AM EDT
WASHINGTON D.C. (TheStreet) –– In the coming weeks, Americans could face sweeping changes to the tax deferral status and funding strategies of their retirement plans.
The Senate Finance Committee last week held a hearing (a webcast and testimony can be found here) to discuss proposals for strengthening the nation's retirement system as well as dealing with the reality that these plans are a ripe target for deficit reduction plans.


...


"All of the reforms I read about lately seem directed toward reducing the amount of money that people may set aside in defined contribution plans and IRAs," U.S. Senator Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, says in his remarks. "For example, the National Commission on Fiscal Responsibility recommended capping pretax contributions at $20,000. The Congressional Budget Office describes a proposal to reduce annual contributions to 401(k)-type plans by $7,650 for older workers, largely by repealing the ability of workers at age 50 to begin making catch-up contributions. IRA contributions also would be cut by $1,500 for older individuals."

"Many of these proposals are offered in the name of greater progressivity in the tax code, and helping lower-wage workers," he added. "But this just doesn't make sense.
...

"The purpose of the retirement income system is to promote an adequate retirement, not to promote tax sheltering through 401(k)s," testified William Gale, a co-director of the Urban-Brookings Tax Policy Center at the Brookings Institution.
...
Gale's proposal would enact a flat-rate refundable credit (of either 18% or 30%) that would be deposited directly into the saver's account. Balances would still owe no taxes until withdrawn.

Gale cited the Tax Policy Center's estimate that the immediate, direct revenue loss associated with contributions to IRAs and 401(k) plans will exceed $1 trillion over the next decade. Converting current deductions to a tax credit worth 18% of a taxpayer's retirement saving contributions would raise more than $450 billion in revenues over the next decade relative to current law, he says.

Workers' and firms' contributions to employer-based 401(k) accounts would no longer be excluded from income subject to taxation, contributions to IRAs would no longer be tax-deductible, and any employer contributions to a 401(k) plan would be treated as taxable income to the employee (just as current wages are). All qualified employer and employee contributions would be eligible for a flat-rate refundable tax credit given to the employee.

"The credit would be deposited directly into the retirement saving account, as opposed to the current deduction, which simply results in a lower tax payment than otherwise," Gale says..


http://www.thestreet.com/story/11257753/1/401k-tax-changes-may-be-on-fast-track.html?puc=outbrain&cm_ven=outbrain&obref=obnetwork


Link to testimony with details in article

basically - cap contributions, make everything taxable, drop employer contributions, so employers could spend the money on employee health insurance (see testimony vanderhei, bottom page 9). government collects tax, gives "credit" back on employee contributions. by taxing 401k's, increase gov revenues, gets rid of tax shelter (for the rich).

Link Posted: 9/29/2011 5:03:15 AM EST
They should be getting rid of caps, not lowering them!
Link Posted: 9/29/2011 5:06:19 AM EST
The Brookings Institute is a Left Of Center Think Tank.

It is all about finding tax revenue for the here and now, it will do nothing to cap costs or control spending.

What they really want is to make every retired worker dependent upon the Federal Government.

They want their Serfs back.
Link Posted: 9/29/2011 5:06:33 AM EST
Hate to break it to some but the Gov IS going to tax the shit out of your 401k's as sure as the sun comes up.
Link Posted: 9/29/2011 5:06:44 AM EST
Let me guess who comes-up short a chair when the music stops.
Link Posted: 9/29/2011 5:06:57 AM EST
Link Posted: 9/29/2011 5:09:02 AM EST
They've already stolen all the wealth that you have so now they are going after what you might have in the future.
Link Posted: 9/29/2011 5:10:28 AM EST
WTF!!! Who comes up with this BS. Congress really does want us to be pessants.
Link Posted: 9/29/2011 5:10:43 AM EST
"so employers could spend the money on employee health insurance "
Link Posted: 9/29/2011 5:11:26 AM EST

Originally Posted By John_Wayne777:

Gale cited the Tax Policy Center's estimate that the immediate, direct revenue loss associated with contributions to IRAs and 401(k) plans will exceed $1 trillion over the next decade.


Translation:

The money you are currently trying to put away for your retirement is irking the big government types because they can't spend it on goodies for others. So fork it over.

Shocking.

When you consider its only been a few decades that 401k type investments have taken off; its only a matter of time before DC decides they need a bigger slice of your savings.
Link Posted: 9/29/2011 5:20:30 AM EST
The purpose of the retirement income system is to promote an adequate retirement, not to promote tax sheltering through 401(k)s,"


Who the fuck are they to say what an adequate retirement is? The same shitstains that set up SS thinking most Americans would either be dead or draw small amount before dying? Maybe I want to work hard and enjoy my autumn years on a yacht bass boat drinking Colt 45 instead of just spending every penny that comes through my hands and not worrying about tomorrow. They should be ENCOURAGING us to put money away for the future because getting old in this country is expensive!

Fuck these cocksuckers, stop looking for revenue and cut your excess bullshit spending and we won't have so many damn issues in this country.
Link Posted: 9/29/2011 5:22:57 AM EST
Link Posted: 9/29/2011 5:27:25 AM EST
Hi. I'm from the government. I'm going to take your property to help you have property. I am going to restrict your freedom to help protect your freedom.

WAR IS PEACE.

FREEDOM IS SLAVERY.

IGNORANCE IS STRENGTH.
Link Posted: 9/29/2011 5:29:46 AM EST
If they change the rules, people will act accordingly. Then, they will be surprised that people want to actually keep their own money.
Link Posted: 9/29/2011 5:30:01 AM EST
Originally Posted By John_Wayne777:
Originally Posted By Vegitan:
Who the fuck are they to say what an adequate retirement is?


They're educated and compassionate. Only a rich fatcat would think otherwise. Is that you, citizen? Are you a greedy, rich fatcat concerned only with making money and not the plight of poor single mothers in the inner cities who can't feed their children? We have to spread the wealth around a little...everyone has to have some skin in the game.



Doesn't matter.

When the public system (Social Security) collapses, they go after the private system (401Ks, IRAs, etc). Liberals have done this throughout history all over the world. We just saw it done with Obamacare. Medicare/Medicaid wasn't enough so they "closed the system" maximizing their ability to control and distribute.

What we are hearing is noise. Noise that is used to attempt to justify what they know they must do to keep their flawed programs and ideas going. It's a double-down on stupid.

I cut my 401k contributions down to the minimum match after the 2008 elections. I am saving cash, and paying off my mortgage as early as possible. The new successful retirement plan will be to have cash in hand, no liabilities/fixed costs, and avoid deferred benefit plans/accounts that the gov can seize via taxation or inflation.
Link Posted: 9/29/2011 5:33:20 AM EST
They are about 1 year too late on this. The SENATE is not going to find any support for this in the House, as it attacks not only Republicans but the stock market as well.
Link Posted: 9/29/2011 5:34:17 AM EST
Originally Posted By AR-180:
If they change the rules, people will act accordingly. Then, they will be surprised that people want to actually keep their own money.


Wife and I stopped contributing to our 401k plans over a year ago because we were concerned that at some point the government would NOT be able to resist the vast amounts of cash people have socked away.
Link Posted: 9/29/2011 5:36:07 AM EST
Originally Posted By John_Wayne777:

Gale cited the Tax Policy Center's estimate that the immediate, direct revenue loss associated with contributions to IRAs and 401(k) plans will exceed $1 trillion over the next decade.


Translation:

The money you are currently trying to put away for your retirement is irking the big government types because they can't spend it on goodies for others. So fork it over.




http://www.brookings.edu/experts/galew.aspx

Senior Fellow, Economic Studies
Director, Retirement Security Project
Co-director, Urban-Brookings Tax Policy Center
Arjay and Frances Miller Chair in Federal Economic Policy

Bill Gale, the Arjay and Frances Miller Chair in Federal Economic Policy in the Economic Studies Program at Brookings, is an expert on tax policy, fiscal issues, pensions, and saving behavior. He is also co-director of the Tax Policy Center and director of the Retirement Security Project.



Budget and fiscal policy; public and private pensions; saving behavior; tax policy














Research and Commentary


Featured


(Still) Tempting Fate: An Updated Federal Budget Outlook - August 30, 2011 The Brookings Institution


Buffett Is Right: Raise Taxes on the Wealthy - August 15, 2011 CNN


A Value-Added Tax for the United States: Part of the Solution - July 22, 2010 The Brookings Institution



Debating the Buffett Rule: Tax Reforms and the Wealthy - September 22, 2011 Brookings Up Front Blog


On the President’s Recommendations to the Joint Select Committee - September 19, 2011 The Brookings Institution


@ Brookings Podcast: The Budget Deal Won’t Solve Long-Term Deficit Problem - September 16, 2011


Tax Reform Options: Promoting Retirement Security - September 15, 2011 United States Senate Committee on Finance


The United States, Long-term Debt and the Need for Economic Stimulus - September 08, 2011 Brookings Up Front Blog


A Proposal to Restructure Retirement Saving Incentives in a Weak Economy with Long-Term Deficits - September 08, 2011The Brookings Institution


The Federal Budget Outlook: A Post Budget Deal Update - August 12, 2011 The Brookings Institution


Good News and Bad News in Debt Limit Deal - August 01, 2011 The Brookings Institution


Around the Halls: The Debt Limit Clock Runs Out - July 29, 2011 Brookings Up Front Blog


Around the Halls: Forging a Compromise on the Debt Limit - July 22, 2011 Brookings Up Front Blog


Don't Fall for Corporate Repatriation - June 27, 2011 POLITICO


Reforming Taxes and Raising Revenue: Part of the Fiscal Solution - May 2011 The Brookings Institution


Raising the Federal Government's Debt Ceiling - March 28, 2011 U.S. News and World Report


Ten-Year Impacts of Individual Development Accounts on Homeownership: Evidence from a Randomized Experiment - March 04, 2011 The Brookings Institution


A VAT for the United States: Part of the Solution - March 2011 Tax Notes


President’s Budget Proposal Could Help Up to 78 Million More Workers to Save for Retirement - February 22, 2011 Brookings Up Front Blog


The Primary Obstacle to a Major Deal on the Budget - February 20, 2011 The Washington Post


Tempting Fate: The Federal Budget Outlook - February 08, 2011 The Brookings Institution


What Will It Take to Reform the Tax System? - January 14, 2011 Brookings Up Front Blog


Activist Fiscal Policy - Fall 2010 - Journal of Economic Perspectives


Around the Halls: The Fiscal Commission Vote - December 03, 2010 Brookings Up Front Blog


Five Myths About Cutting the Deficit - November 29, 2010 The Washington Post


Around the Halls: Analyzing the Plans to Solve the Budget Crisis - November 19, 2010 Brookings Up Front Blog


Around the Halls: Reducing the Budget Deficit - November 12, 2010 Brookings Up Front Blog


What’s the Biggest Tax Mistake That Might Be Made This Year? - October 15, 2010 The New York Times





Ph.D., Stanford University, 1987; B.A., Duke University, 1981; London School of Economics, 1980

Past Positions
Vice President and Director of the Economic Studies Program, Brookings (2006-2009); Joseph A. Pechman Fellow, Brookings (1992-2001); Senior Staff Economist, President's Council of Economic Advisers (1991-92); Assistant Professor, Department of Economics, University of California, Los Angeles (1987-91)



He has never held a real position outside of academia & government.



Link Posted: 9/29/2011 5:39:11 AM EST
C'mon folks, what part of re-distribution of wealth do you all not understand?


The poor folks need money to live on and if the commies keep giving it to them they will keep electing them.

We must all do our fair share to keep the march to communisim going strong.


On another note, just what will it take before the working populace gets fed up and heads off to dc?
Link Posted: 9/29/2011 5:39:42 AM EST
Originally Posted By AR-180:
If they change the rules, people will act accordingly. Then, they will be surprised that people want to actually keep their own money.


Thagt's where it all breaks down you see, because it is, of course, the government's money. Stupid proles, thinking they can own things.
Link Posted: 9/29/2011 5:41:21 AM EST
Originally Posted By mousehunter:
They are about 1 year too late on this. The SENATE is not going to find any support for this in the House, as it attacks not only Republicans but the stock market as well.


You will find this well hidden in one of the bills that they have to pass to know what is in it.

Shit man, they might have already done it. barney frank.
Link Posted: 9/29/2011 5:42:53 AM EST
I work at a company that designs, and administers retirement programs (both Defined Benefit and Defined contribution).

I can tell you as someone that has tested plans for compliance with current regulations that 401(k)'s are the least abused and most "equitable" aspect of a modern optimized retirement program. You see a much much smaller spread in 401 (K) then you do elsewhere. The real big discrepancies really show up on the Defined Benefit side of things.
Link Posted: 9/29/2011 5:45:21 AM EST
These cocksuckers force Social Security on us, mismanage it into the ground, and are now looking to kill off the alternatives to Social Security people like me have to rely on to save for old age.


They of course never have to worry because their own government guaranteed pensions are the last thing in the world they'd ever mess with.

Link Posted: 9/29/2011 5:57:09 AM EST
so what are they calling this one? The "Fuck you for planning ahead Act of 2011"??? This would be a double whammy for most of the middle class as well, as that new taxable income would in many cases wind up being in a higher bracket and therefore taxed at a higher rate. Motherfuckers.
Link Posted: 9/29/2011 5:57:25 AM EST

Originally Posted By raven:
These cocksuckers force Social Security on us, mismanage it into the ground, and are now looking to kill off the alternatives to Social Security people like me have to rely on to save for old age.

They of course never have to worry because their own government guaranteed pensions are the last thing in the world they'd ever mess with.

Many of the people who designed Social Security thought that it would not last much past 1960, 1965 at the outside. They just wanted to "do something" until better ideas came along.

They figured that we would be smart enough to figure out something better 25-30yrs in the future.

How did that work out?
Link Posted: 9/29/2011 6:01:28 AM EST
Reminds me of the line always used in regards to the Bush tax cuts...



Gale cited the Tax Policy Center's estimate that the immediate, direct revenue loss associated with contributions to IRAs and 401(k) plans will exceed $1 trillion over the next decade.


HOW ARE WE GONNA PAY FOR THAT???





Link Posted: 9/29/2011 6:02:15 AM EST
Hmmmmm....The government trying to help people even more by not allowing them to save for their own future......Sounds like a good way to make the US population even more dependent on the government.
Link Posted: 9/29/2011 6:06:00 AM EST
Originally Posted By scotchymcdrinkerbean:
Originally Posted By AR-180:
If they change the rules, people will act accordingly. Then, they will be surprised that people want to actually keep their own money.


Thagt's where it all breaks down you see, because it is, of course, the government's money. Stupid proles, thinking they can own things.


My thumb aches at the thought of all the P-Mag covers that need popping...
Link Posted: 9/29/2011 6:08:43 AM EST
Originally Posted By Merrell:
Originally Posted By John_Wayne777:

Gale cited the Tax Policy Center's estimate that the immediate, direct revenue loss associated with contributions to IRAs and 401(k) plans will exceed $1 trillion over the next decade.


Translation:

The money you are currently trying to put away for your retirement is irking the big government types because they can't spend it on goodies for others. So fork it over.


http://www.brookings.edu/~/media/Files/experts/galew/galew_portrait.jpg?bc=Transparent&mh=177&mw=158

http://www.brookings.edu/experts/galew.aspx

Senior Fellow, Economic Studies
Director, Retirement Security Project
Co-director, Urban-Brookings Tax Policy Center
Arjay and Frances Miller Chair in Federal Economic Policy

Bill Gale, the Arjay and Frances Miller Chair in Federal Economic Policy in the Economic Studies Program at Brookings, is an expert on tax policy, fiscal issues, pensions, and saving behavior. He is also co-director of the Tax Policy Center and director of the Retirement Security Project.



Budget and fiscal policy; public and private pensions; saving behavior; tax policy




Research and Commentary


Featured


(Still) Tempting Fate: An Updated Federal Budget Outlook - August 30, 2011 The Brookings Institution


[span style='color: blue;']Buffett Is B.A., Duke University, 1981; London School of Economics, 1980

Past Positions
Vice President and Director of the Economic Studies Program, Brookings (2006-2009); Joseph A. Pechman Fellow, Brookings (1992-2001); Senior Staff Economist, President's Council of Economic Advisers (1991-92); Assistant Professor, Department of Economics, University of California, Los Angeles (1987-91)



He has never held a real position outside of academia & government.

http://farm4.static.flickr.com/3593/3379160523_856b56a70d.jpg



Ivory Tower cum wad.

Figures.,
Link Posted: 9/29/2011 6:09:29 AM EST
[Last Edit: 9/29/2011 6:12:22 AM EST by SimonPhoto]
In 2007, total private holdings in 401k plans was around $3 trillion. I'm sure that number has changed, but use it as a basis for a moment - what do you suppose would happen if $3 trillion was pulled from the market? The Dow would go drop like a fat kid chasing a donut down a hill, that's what.

To be so concerned about a double-dip recession, they sure ignore the consequences of their own actions that impact the economy.
Link Posted: 9/29/2011 6:27:10 AM EST
Originally Posted By SimonPhoto:
In 2007, total private holdings in 401k plans was around $3 trillion. I'm sure that number has changed, but use it as a basis for a moment - what do you suppose would happen if $3 trillion was pulled from the market? The Dow would go drop like a fat kid chasing a donut down a hill, that's what.

To be so concerned about a double-dip recession, they sure ignore the consequences of their own actions that impact the economy.


That's the plan they have...cause a big meltdown then all citizens will be dependant on the .gov to survive. We are then serfs with no power except what the ivory tower politicians tell us we have and most of American won't mind, sadly. They are just too lazy to care.

The Founders are most likely very, very unhappy with us right now.
Link Posted: 9/29/2011 6:28:50 AM EST
Well, since the Democrats represent the parasites.......of course they will try and attack section 401 types of deferrals, etc.
Link Posted: 9/29/2011 6:30:48 AM EST
What are the penalties for yanking 401K's out of the market now?

Link Posted: 9/29/2011 6:31:55 AM EST
Originally Posted By Oliver:
Hate to break it to some but the Gov IS going to tax the shit out of your 401k's as sure as the sun comes up.


This.....and, they will soon find a way to "convert" your 401(k) to safe, secure government retirement funds.

Link Posted: 9/29/2011 6:32:57 AM EST
Originally Posted By Merrell:
What are the penalties for yanking 401K's out of the market now?



Depends on your age.
Link Posted: 9/29/2011 6:32:59 AM EST
[Last Edit: 9/29/2011 6:33:59 AM EST by DK-Prof]
Link Posted: 9/29/2011 6:37:02 AM EST
Originally Posted By DK-Prof:
Originally Posted By cm:

401(k) Tax Changes May Be On Fast Track

Joe Mont

09/23/11 - 11:32 AM EDT
WASHINGTON D.C. (TheStreet) –– In the coming weeks, Americans could face sweeping changes to the tax deferral status and funding strategies of their retirement plans.
The Senate Finance Committee last week held a hearing (a webcast and testimony can be found here) to discuss proposals for strengthening the nation's retirement system as well as dealing with the reality that these plans are a ripe target for deficit reduction plans.


...


"All of the reforms I read about lately seem directed toward reducing the amount of money that people may set aside in defined contribution plans and IRAs," U.S. Senator Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, says in his remarks. "For example, the National Commission on Fiscal Responsibility recommended capping pretax contributions at $20,000. The Congressional Budget Office describes a proposal to reduce annual contributions to 401(k)-type plans by $7,650 for older workers, largely by repealing the ability of workers at age 50 to begin making catch-up contributions. IRA contributions also would be cut by $1,500 for older individuals."

....


http://www.thestreet.com/story/11257753/1/401k-tax-changes-may-be-on-fast-track.html?puc=outbrain&cm_ven=outbrain&obref=obnetwork


Link to testimony with details in article

basically - cap contributions, make everything taxable, drop employer contributions, so employers could spend the money on employee health insurance (see testimony vanderhei, bottom page 9). government collects tax, gives "credit" back on employee contributions. by taxing 401k's, increase gov revenues, gets rid of tax shelter (for the rich).



I thought the current cap was $16,500

How is capping it at $20,000 (highligted above) a reduction?


I assume they are limiting part of the $6,000 catch up for older workers.

Plus, can't these idiots see that this is only a short term revenue stream into the Treasury.

They are always kicking the can down the road and protecting parasites.
Link Posted: 9/29/2011 6:37:40 AM EST
Originally Posted By Skip237:

I cut my 401k contributions down to the minimum match after the 2008 elections. I am saving cash, and paying off my mortgage as early as possible. The new successful retirement plan will be to have cash in hand, no liabilities/fixed costs, and avoid deferred benefit plans/accounts that the gov can seize via taxation or inflation.


Inflation will very quickly fix your little red wagon.

Cash is great for the short term. In the long run, it's a guaranteed massacre.
Link Posted: 9/29/2011 6:38:09 AM EST
Originally Posted By efpeter:
Hi. I'm from the government. I'm going to take your property to help you have property. I am going to restrict your freedom to help protect your freedom.




WAR IS PEACE.

FREEDOM IS SLAVERY.

IGNORANCE IS STRENGTH.


TAX OURSELVES INTO PROSPERITY?
REGULATE OURSELVES INTO LIBERTY?
BORROW OUR WAY OUT OF DEBT?
YES WE CAN!!!
Link Posted: 9/29/2011 6:39:50 AM EST
Originally Posted By Merrell:
What are the penalties for yanking 401K's out of the market now?



All of the taxes and a hefty penalty. I'd guesstimate you'll lose half at one fell swoop.
Link Posted: 9/29/2011 6:40:35 AM EST
Originally Posted By dex357:
Originally Posted By Merrell:
What are the penalties for yanking 401K's out of the market now?



Depends on your age.


10% if you are younger than 59.5.
Link Posted: 9/29/2011 6:40:46 AM EST
Originally Posted By DK-Prof:
Originally Posted By cm:

401(k) Tax Changes May Be On Fast Track

Joe Mont

09/23/11 - 11:32 AM EDT
WASHINGTON D.C. (TheStreet) –– In the coming weeks, Americans could face sweeping changes to the tax deferral status and funding strategies of their retirement plans.
The Senate Finance Committee last week held a hearing (a webcast and testimony can be found here) to discuss proposals for strengthening the nation's retirement system as well as dealing with the reality that these plans are a ripe target for deficit reduction plans.


...


"All of the reforms I read about lately seem directed toward reducing the amount of money that people may set aside in defined contribution plans and IRAs," U.S. Senator Orrin Hatch, R-Utah, ranking member of the Senate Finance Committee, says in his remarks. "For example, the National Commission on Fiscal Responsibility recommended capping pretax contributions at $20,000. The Congressional Budget Office describes a proposal to reduce annual contributions to 401(k)-type plans by $7,650 for older workers, largely by repealing the ability of workers at age 50 to begin making catch-up contributions. IRA contributions also would be cut by $1,500 for older individuals."

....


http://www.thestreet.com/story/11257753/1/401k-tax-changes-may-be-on-fast-track.html?puc=outbrain&cm_ven=outbrain&obref=obnetwork


Link to testimony with details in article

basically - cap contributions, make everything taxable, drop employer contributions, so employers could spend the money on employee health insurance (see testimony vanderhei, bottom page 9). government collects tax, gives "credit" back on employee contributions. by taxing 401k's, increase gov revenues, gets rid of tax shelter (for the rich).



I thought the current cap was $16,500

How is capping it at $20,000 (highligted above) a reduction?


By eliminating the tax advantaged status, and making the credit available only to lower earners, and ending catchup contributions.
Link Posted: 9/29/2011 6:41:49 AM EST

Originally Posted By DK-Prof:

I thought the current cap was $16,500

How is capping it at $20,000 (highligted above) a reduction?

The current Employer/Employee cap is $49,000. The article is not clear one what they mean. One would have to go to the Brookings website and read just what they intend.
Link Posted: 9/29/2011 6:44:35 AM EST

Originally Posted By caexpat:
They should be getting rid of caps, not lowering them!



Remember, these are libtards running things now. They always do the opposite of what is needed.



Link Posted: 9/29/2011 6:55:19 AM EST
Originally Posted By Merrell:



[span style='color: blue;']Buffett Is B.A., Duke University, 1981; London School of Economics, 1980

Past Positions
Vice President and Director of the Economic Studies Program, Brookings (2006-2009); Joseph A. Pechman Fellow, Brookings (1992-2001); Senior Staff Economist, President's Council of Economic Advisers (1991-92); Assistant Professor, Department of Economics, University of California, Los Angeles (1987-91)



He has never held a real position outside of academia & government.



And he pretty much went right into high/decent paying jobs. He's been living in a bubble his whole life. Probably never had to work an honest day, never had to scrimp to put food on the table, etc.
Link Posted: 9/29/2011 6:56:14 AM EST
"Gonna get all your money before I quit this bitch." -President Barack H. Obama, Sept. 29 2011
Link Posted: 9/29/2011 6:57:04 AM EST
Link Posted: 9/29/2011 6:58:15 AM EST
Originally Posted By Dorcas:
Originally Posted By dex357:
Originally Posted By Merrell:
What are the penalties for yanking 401K's out of the market now?



Depends on your age.


10% if you are younger than 59.5.


Anyone want to speculate on the impact vs. a .gov takeover of 401K's?

Link Posted: 9/29/2011 7:02:38 AM EST
EXCELLENT!

Let them try moving on this, with the election only 13 months away!

EVEN BETTER!

Let them try some gun bans while they're at it!

Link Posted: 9/29/2011 7:06:25 AM EST
So what does ARFCOM recommned I spend the $$ I currently allocate to my 401k contributions on after I stop my contributions?

PMs?
Land?
Ammo?
An open-sea worthy boat?
Link Posted: 9/29/2011 7:09:01 AM EST
[Last Edit: 9/29/2011 7:09:41 AM EST by Katana16j]
Originally Posted By DK-Prof:
Originally Posted By RedFalconBill:

Originally Posted By DK-Prof:

I thought the current cap was $16,500

How is capping it at $20,000 (highligted above) a reduction?

The current Employer/Employee cap is $49,000. The article is not clear one what they mean. One would have to go to the Brookings website and read just what they intend.


Ah - I see how that could be the case. Good point.


Relavent Caps -

16,500 is the current maximum employee deferral, 5500 is the current maximum "Catch-up" deferral allowed to individuals over the age of 50. So thats a maximum of 22,000 of your own money that you can put into a Defined Contribution plan this year.

49,000 dollars is the maximum amount that you can add to your account (be it you or your employer) this year. That comes into play when you have 401(k) matching contributions, Money Purchase or Profit sharing plans. Safe Harbor and QNEC contributions also count against that maximum but in practice they are given to employees to allow the employers to pass the nondiscrimination and Average Deferral testing so those contributions are usually minimized. Its not really possible to bounce against the maximum with those.

Usually you will see guys putting away 16,500 of thier own money, and the company kicking in an additional 32,500 for the important fellows (and 3 percent of pay for everyone else). However there are many relevant regulations that determine the best way to compose that.

Irregardless 49,000 is the maximum number you can boost your account (not including Catch Up Deferrals which are sorta a freebie).


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