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Penalty-free 401(k) withdrawals still not on the agenda (Obama breaks a promise)
Politi-fact ^ | April 10, 2009 | Angie Drobnic Holan

Posted on 04/11/2009 7:37:20 AM PDT by Michaelo

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So what's going to happen to the people who withdrew 401K money in 2008 once they heard Obama say that they would not be penalized for it? Remember, this tax deduction would have been retroactive to 2008. Penalties to withdraw early are high, up to 40% depending on the person.

Now it's almost tax day and no action has been taken.

Thanks for nothing, smooth talking candidate.

1 posted on 04/11/2009 7:37:20 AM PDT by Michaelo
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To: Michaelo

I seems the time may soon arrive when cheating on taxes will be commonplace, and considered the patriotic thing to do.


2 posted on 04/11/2009 7:40:29 AM PDT by Atlas Sneezed (Security sucks. I want my freedom back.)
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To: Michaelo

I waited and didn’t take a withdrawal, but I was really hoping this would have been on the table. Makes perfect sense to stimulate the econony.


3 posted on 04/11/2009 7:40:44 AM PDT by dawn53
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To: Beelzebubba
I seems the time may soon arrive when cheating on taxes will be commonplace, and considered the patriotic thing to do.


4 posted on 04/11/2009 7:43:14 AM PDT by HangnJudge
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To: Michaelo

” Penalties to withdraw early are high, up to 40% depending on the person.”

Why should this be a problem.. Just say your 59 1/2 and refuse to show your birth certificate.


5 posted on 04/11/2009 7:43:31 AM PDT by babygene (It seems that stupidity is the most abundant element in the universe)
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To: Michaelo

"You can't spend your whole life worrying about your mistakes! You f*cked up - you trusted us!"

6 posted on 04/11/2009 7:47:15 AM PDT by Mad_Tom_Rackham (What did Obama's Teleprompter know, and when did it know it...)
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To: Michaelo

“Borrowing” ones own money from Big Brother at a 40% rate of confiscation! Ain’t it swell to live in a free country!


7 posted on 04/11/2009 7:47:58 AM PDT by Oldpuppymax (AGENDA OF THE LEFT EXPOSED)
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To: Michaelo
Obama breaks a promise

Don't you mean, Obama breaks another Promise?

8 posted on 04/11/2009 7:54:06 AM PDT by JohnG45
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To: dawn53
Makes perfect sense to stimulate the economy.

Except for one simple fact: YOU would be deciding where to spend YOUR money. Only the all-knowing bureaucrats and politicians are qualified to do this.

9 posted on 04/11/2009 7:59:41 AM PDT by Mad_Tom_Rackham (What did Obama's Teleprompter know, and when did it know it...)
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To: JohnG45
Don't you mean, Obama breaks another Promise?

Fortunately, every one of his lies is somebody that got conned into voting for him's last straw.

10 posted on 04/11/2009 8:01:05 AM PDT by tacticalogic ("Oh bother!" said Pooh, as he chambered his last round.)
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To: babygene
Just say your 59 1/2 and refuse to show your birth certificate.

I like the way you think.

11 posted on 04/11/2009 8:01:40 AM PDT by Mad_Tom_Rackham (What did Obama's Teleprompter know, and when did it know it...)
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To: dawn53

I’m not sure but can’t you take a 401k and roll it into a rollover IRA then to a Roth IRA and not have to take any penalty (other than the taxes that we already owe on the money)? Roll to a Roth and pay no penalty, then cash what you need out of the Roth and pay the tax.


12 posted on 04/11/2009 8:03:00 AM PDT by no-no bad dog
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To: Beelzebubba

“It seems the time may soon arrive when cheating on taxes will be commonplace,.....”
......when people feel their taxes are unfair they will give themselves “tax cuts”....and you’re right,the time is coming soon....we’ll be just like Italy where tax evasion is said to be routine.


13 posted on 04/11/2009 8:06:51 AM PDT by STONEWALLS
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To: Michaelo

Barack Lied, Families Cried.


14 posted on 04/11/2009 8:24:15 AM PDT by sono (My Chevy dealer is now the Federal Unionized Bureau of Auto Repair aka FUBAR.)
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To: Michaelo

“Penalties to withdraw early are high, up to 40% depending on the person.”

BTW, I believe your 40% number is incorrect... If you are under 59 1/2 the penalty is 10% plus the taxes. Even then if done correctly you can avoid the penalty as long as you withdraw only 10% (could be 8%, I’m not sure) per year. You must withdraw this amount for 5 years though.


15 posted on 04/11/2009 8:30:27 AM PDT by babygene (It seems that stupidity is the most abundant element in the universe)
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To: Michaelo
Oh, just wait until the next shoe drops: Federalization of retirement plan assets.

The stock market is just too volatile and scary for people to control their own retirement funds, you see. So our Most Benevolent President will ask Congress to eliminate all the different contributory retirement plans now available (401k, 403b, IRA's, etc.) in favor of a shiny, brand-new Unified Retirement Account - where all the contribution rules will be the same for everyone and your investment will be guaranteed against loss!! Sounds wonderful, right?

Uh, yeah, except for this: your money will earn a fixed rate of 3% per year and will be inaccessible to you until you retire at age.. oh,.. haven't figured that out yet, but don't worry, the government actuaries will get right on it. The same actuaries, by the way, who say that Social Security is perfectly sound. Feel better now?

16 posted on 04/11/2009 8:35:37 AM PDT by andy58-in-nh (You have enemies? Good. That means you've stood up for something, sometime in your life.)
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To: babygene
Frankly, with Obama as an example, there's no reason whatsoever for any of us to PROVE OUR AGE.

Imagine the distress at IRS if everyone claimed he or she were 65 ~ even those over 70.

17 posted on 04/11/2009 8:48:33 AM PDT by muawiyah
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To: Mad_Tom_Rackham

“My advice is they both start drinking heavily”


18 posted on 04/11/2009 8:50:52 AM PDT by A_Former_Democrat
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To: Michaelo

I don’t think there’s an early withdrawal penalty if you pull out from your IRA/401K to pay Federal taxes due. So underpay your taxes during the year, and then withdraw from your IRA/401K to pay the taxes due.

I am not an accountant/CPA, but I try to find ways to slowly and surely eliminate wealth that has US Government strings on it...


19 posted on 04/11/2009 9:27:13 AM PDT by PugetSoundSoldier (Indignation over the sting of truth is the defense of the indefensible)
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To: Michaelo
I sent another idea to my congress critter recently.

I lost a ton in the market back in 2001, about 1/3 of my non IRA funds. I was only allowed to take $3k off a year. Now that I'm retired, I'm pretty much living off my IRA funds and my taxable funds are pretty much gone after losing again this year. I will NEVER have the chance to recoup my losses unless I sell my house and use the money to invest with. So now, I just withdraw from the IRA and take my measly $3k off every year.

If anybody cares enough here, write your congress men and Senators and ask if the loss level could be raised to a more appropriate number, like maybe $10k-$20K. That way I could draw out more money and not have to pay taxes on it after losing such a large sum over the years. At $3k per year, it will take the next 50 years to get even on the amounts I have lost, while still paying taxes on money I draw out of my IRA. My IRA has losses also, but at least I have a few years to recoup some of them.

Does anybody know how long the $3k limit has been in effect? I'm betting at least 30 years. $3k 30 years ago would be like $20K now.

20 posted on 04/11/2009 9:28:01 AM PDT by chuckles
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