401(k) Tax Changes May Be On Fast Track

The Street ^ | 09/23/2011 | The Street

[Rusty0604]

In the coming weeks, Americans could face sweeping changes to the tax deferral status and funding strategies of their retirement plans.

[eyedigress]

Cashing out in 2008 without messing with it would make you a multi-millionaire over-nite.

[Rusty0604]

A lot of people are raising a family when they are young and can’t save a lot. The catch up provision helps people that can finally afford to save more during their last working years.

[unixfox]

Just wait till they try to confiscate the gold. AGAIN.

[Rusty0604]

I know a lot of people lost all their gold in boating accidents.

[1010RD]

Great more certitude under which to make a decision.

This is the problem with political leadership - death by a thousand cuts. You don’t help the patient by cutting slowly and over time.

We need a leader to say ‘Here’s what we’re going to do. It will be painful, but at the end we’ll be stronger and better for it.’ Get it over with already - take the losses and let’s move on.

[1010RD]

Post it.

[1010RD]

Every one of us should make the same calculation as should the government. Then the government should give us the equivalent amount in say land, mineral and other lease rights, buildings, surplus equipment and all the other things that they hold that they have no business holding.

Outstanding idea.

[RockyMtnMan]

Let me cash out and pay a flat 15% tax on the sum (and NO penalties) and I’d be out of my employer sponsored 401k in a heartbeat.

[Alberta's Child]

Understood. I’m not saying the catch-up provision is a bad idea. I’m just pointing out that a modification of this provision is hardly a draconian overhaul of the 401(k) rules, when you consider that it didn’t even exist until a few years ago.

[AnotherUnixGeek]

For one thing, reducing the maximum that can be contributed by those 50 and older under the "catch-up" provisions of the tax code for 401(k) and IRA accounts isn't all that big a deal.

I'm pretty sure that it is that big a deal if you happen to be 50 or over and need to catch up on your contributions to your retirement savings. This is how smart government confiscation of private savings goes - small increments and focused targeting that leaves your neighbor saying he doesn't think it's all that big a deal.

[Newtoidaho]

And the return on SS gets really bad if you die before you get to collect any of it back.

[aMorePerfectUnion]

Right you are. This Administration is also laying the legal groundwork for capital controls right now to keep wealth from fleeing the country. And a reporting system that lays the groundwork for a wealth tax.

[berdie]

later

[Mouton]

Check this piece of logic (or sh..)from the lefty Brookings:

“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.”

I see, sheltering income is not related to funding an adequate retirement. That is as insane a statement as any other such as the rich pay lower tax rates than do those who are moderate earners.

This is not going to end well...either the left wins and they take away everything anyone has worked for and thereby puts everyone in the gulog or REV 11 starts. Neither is a win for the country.

[Mouton]

One more point, an 18% credit on earned income for retirement. Hum, on the surface, wow, a credit. The down side is one needs how much income to generate enough tax due to qualify for a decent contribution. Most people in the 125K range right now pay an effective tax rate around 18%, or 22500...so 18% of that is tada a whopping 4K.

Zero and the dems can take that 18% and stuff it where the sun don’t shine.

[bkopto]

Forget 401Ks. I don’t contribute to mine anymore. I don’t want the US Govt as my partner in retirement. They will change the rules on the 401Ks, if not outright confiscation of them altogether, later - mark my words. The counterparty risk of the 401K is way too high, IMHO. I’ll pay the taxes now, thank you very much.

[Mouton]

And don’t forget, money that grows in a 401 is subject to ordinary tax rates when taken out.

Take the money and invest in long term investments and hope they don’t increase the cap gains tax too much. Of course, that is the next target of the Zero and his minions.

Welcome to the Gulog.

[no-s]

This is not going to end well...either the left wins and they take away everything anyone has worked for and thereby puts everyone in the gulog or REV 11 starts. Neither is a win for the country.

well, maybe they've done the math and figure it will turn out well for them, heheh.

[no-s]

Then the government should give us the equivalent amount in say land, mineral and other lease rights, buildings, surplus equipment and all the other things that they hold that they have no business holding. Twofold benefit, people made whole and government reduced: win-win.

I think you're on to something there - Senior Creditors are we the people through the SS Ponzi fund. Then everyone else, politicians and foreign gov't last. Reduce the gov't to what can be funded by the NRST. No income tax ever legal again.

This idea is worth developing.

[goodnesswins]

A new kind of “homestead”.....altho I really think this gov’t would rather sell our assets to China....