Posted on 06/14/2020 4:57:03 AM PDT by karpov
If you withdraw money from a traditional IRA or a 401(k) before age 59.5, you not only pay income taxes on the gains but a 10% early withdrawal penalty. This year, Half of Americans took from retirement savings or plan to amid pandemic, survey finds. That number will increase during 2020. The early withdrawal penalty exists to discourage raiding retirement accounts, but this year, tens of millions of people have been thrown out of work due to government-imposed shutdowns. Some of those people need to access any savings they have to pay for necessities. President Trump and congressional Republicans should propose that early withdrawals from retirement accounts, perhaps up to a cap of say $50K, will not be subject to the 10% tax penalty, only the usual income tax on the gains. The government should not be punishing people for economic hardships it has created.
I believe that is already part of the law at least on the 401k side. Does that not extend to IRAs?
Um, they did this up to $100k. Also, if 55 or older, and leaving employment permanently, I believe thre are no longer penalties at all - i.e. it removes the 59 1/2 requirement as long as you never work again.
No reason to call him a “moron”. He didn’t know we were responsible for in depth, Journalistic research before posting.
You’ve got it wrong. I say waive ALL taxes for withdrawals up to $100k. One time. I’m not taking any out until age 71 so Uncle Sam won’t see or miss it.
The IRA is 591/2 unless you you follow the 72t Rules. 401K, 457, and 403B have to meet the Rule of 55.
They should waive all taxes on any amount taken out.
It’s all gonna be funny money soon anyway.
Trump is here to take us through bankruptcy..
Either by inflating the dollar or by creating a new internal dollar and letting the old dollar float while the new one is tied to gold. Only US citizens could convert old dollars to new ones...all external paper of any sort would turn to dust.
That is the ticket, yes.
Waive the income tax and the 10% penalty. I’d take it all out yesterday if they did that.
Demonrats within a very few years are going to be trying to steal every penny people have in their retirement accounts.
Just thinking out loud here....what if I can withdraw money from my 401(k), pay it back in three years to get the full refund in taxes, use the 401(k) money to offset increases in contributions to 401 (k) reducing my taxable income during the same three years? Possible?
ThE_RiPpEr. wrote:
“Just thinking out loud here....what if I can withdraw money from my 401(k), pay it back in three years to get the full refund in taxes, use the 401(k) money to offset increases in contributions to 401 (k) reducing my taxable income during the same three years? Possible?”
Good question.
Too complicated. Now you can return it in 60 days only. Just eliminate it one time. Perhaps offer it again say 10 years down the road. Election year.
If you take a tax deferred 401K or similar loan, you pay it back with taxable income. Covid-19 has temporarily relaxed some rules in this area, but they aren't permanent. If you want increased flexibility withdrawing from retirement accounts, you should explore Roth IRA's and Roth 401K's if your company offers it..
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