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1 posted on 11/09/2009 7:34:13 AM PST by blam
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To: blam

As a qualified retirement plan it cannot be seized by creditors if you file a Chapter 7 or Chapter 13.


I don’t think your house can be seized either so it is not a good arguement...............


2 posted on 11/09/2009 7:38:07 AM PST by PeterPrinciple ( Seeking the truth here folks.)
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To: blam

The lack of money and financial management among the US population is terrible. It used to be taught in schools and our parents used to be fruggle. No new cars..cash for cars...20% down on the house and no refi or second since the goal was to own it outright for retirement or sooner.
Save money every week..prepare for that strike that could come. Etc. Our parents were raised during the depression.
They didn’t have 401k’s.
The Rats will use this Rat induced ignorance to take over all retirement plans and Nanny state those. That is the only fix they want for SS.


3 posted on 11/09/2009 7:39:55 AM PST by Oldexpat
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To: blam

They called my mother an idiot for cashing hers out 2 years ago. Today she’s unemployed and living in a house that’s paid off.


5 posted on 11/09/2009 7:42:24 AM PST by cripplecreek (Seniors, the new shovel ready project under socialized medicine.)
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To: blam
I have a nephew who is in the same position as this man. He has a family to try to keep a roof over their heads, clothe and feed. He has been looking for a job since September, 2008 when Hurricane Ike closed the business he had been at for almost 6 years and hasn't been able to find anything other than an odd job here or there since.

He's held off of his retirement savings but has been told by social services here that he cannot get help as long as he has resources - meaning the 401(k)& retirement savings.

He had to quit college due to inability to pay. What are people supposed to do?

6 posted on 11/09/2009 7:42:44 AM PST by texgal (end no-fault divorce laws return DUE PROCESS & EQUAL PROTECTION to ALL citizens))
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To: blam
A lot of people think the government is going to go after the 401Ks. Maybe they want to hold on to what property they own. Without a job, they can't file chapter 13. Sad thing is, the Fed government wants to go after our property as well.
7 posted on 11/09/2009 7:45:30 AM PST by Earthdweller (Harvard won the election again...so what's the problem.......?)
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To: blam
"When in the course of human events....."
8 posted on 11/09/2009 7:53:16 AM PST by Don Corleone ("Oil the gun..eat the cannolis. Take it to the Mattress.")
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To: blam

“Your 401k or IRA has near-absolute protection in a personal bankruptcy. “

Pfffft. Your 401k has little protection from Democrats looking for money to spend.

If I were to lose my job, and it was a choice between keeping the 401k or keeping the house, I’m cashing in the 401k to pay off my house.

I expect at some time in the not too distant future, Washington will take some or all of my 401k. After all, it’s not fair that I have money in a 401k and some low life from a protected group doesn’t.

Spred yo welf.


9 posted on 11/09/2009 8:00:08 AM PST by brownsfan (The average American: Uninformed, and unconcerned.)
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To: blam

The question is, what will the taxes on it be when you have to pull your money out?

At the moment, what you take out will be taxed at your rate plus a penalty. In 10 years, will the basic tax rate be more than that? Maybe. Even next year, the taxes + penalty will be higher than it is now.


11 posted on 11/09/2009 8:13:51 AM PST by Liberty Ship ("Lord, make me fast and accurate.")
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To: blam
"The absolutely worst thing you can do is to cash out those plans."

Worse than living on the street with kids and wife?

13 posted on 11/09/2009 8:15:45 AM PST by bsf2009
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To: blam

Not to mention that the withdrawel is taxed as a dividend profit (which means you cannot file earned income credit on your tax return) if it’s over a certain amount even if you are only withdrawing what you put in. So if I put in $4000, and withdraw $4000, no money has been made in the stock market, that amount is only what I would have taken home as INCOME if I never put it in the 401K, it’s counted as PROFIT.


19 posted on 11/09/2009 8:25:08 AM PST by autumnraine (You can't fix stupid, but you can vote it out!)
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To: blam
Your 401k or IRA has near-absolute protection in a personal bankruptcy.

However, it has almost no protection in a divorce settlement. If you are facing divorce and you need funds (such as to purchase a place to live), it might be justifiable to cash a 401K in. If done before the settlement, the spouse will share in the costs and penalties associated with an early withdrawl

25 posted on 11/09/2009 8:30:55 AM PST by kidd (Obama: The triumph of hope over evidence)
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To: blam

My son in law filed for bankruptcy a few years back and the court took 1/2 of his 401K. This was probably before the new bankruptcy law passed by congress so I don’t know if the same applies today.


28 posted on 11/09/2009 8:32:57 AM PST by Larry381 ("in the final instance civilization is always saved by a platoon of soldiers" Oswald Spengler)
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To: blam
Your 401k or IRA has near-absolute protection in a personal bankruptcy.

Notice how the author has to qualify his statement with the word near. Near-absolute must mean not absolute. If it's not absolute, it's not absolute.

31 posted on 11/09/2009 8:43:18 AM PST by CodeJockey (If you can read this thank a teacher, if you can read it in English thank a Soldier.)
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To: blam
There are other temptations to cash out - mine, for example, down some 45% and only now beginning to recover (it's at approximately the level it was six years ago). You watch that happen and you watch the fiscal idiocy that has quadrupled federal debt inside a year and you have to be tempted to cash out while you still have anything at all, especially since you won't be hit with capital gains taxes if you haven't any capital gains to report.

The thing is, there really isn't any safe haven although some are safer than others. The bond market isn't that great at the moment and they're still a promise to pay off by people who may or may not be able to. Money market and CD's, heck, even savings accounts, all depend on the financial institutions involved remaining intact. Real estate? Watch the taxes climb. And any of this that is "insured" by a government that will simply run the printing presses to pay you off in worthless money is potentially disastrous. If certain people are sitting on bags of gold like trolls in a Grimm Brothers story at least they don't wake up in the morning to find half of it missing.

33 posted on 11/09/2009 8:48:20 AM PST by Billthedrill
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To: blam

I’ve contemplated cashing out to bury gold coins in the back yard.


35 posted on 11/09/2009 8:59:34 AM PST by Rio (Don't make me come over there....)
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To: blam

I wonder what the leftists in Congress really want.

On one hand, they could eliminate the early withdrawl penalty, encouraging people to tap their 401k and (theoretically) become more dependent on the gov’t.

On the other hand, that’s money lost TODAY that they could spend getting themselves reelected (though really, I don’t think this matters much, they can just borrow as much as they want anyway). And if people keep their 401k, it gives the gov’t an excuse to cop out of their SS payments (because you don’t “need” it).

The one thing I do “know” is that when retirement time comes for me, the gov’t WILL change the rules I’ve been living under.


42 posted on 11/09/2009 9:53:34 AM PST by Darth Reardon (Im running for the US Senate for a simple reason, I want to win a Nobel Peace Prize - Rubio)
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