Disturbing Trend -- and Worse to Come [Hardship withdrawals from 401(k)'s at record high]

American Thinker ^ | August 21, 2010 | Eileen F. Toplansky

[2ndDivisionVet]

[fightinJAG]

I am seeing more posts getting away from excerpting.

I think excerpts encourage people to click on the link, which is only just to reward the author who wrote the piece and the site that published it.

As for your post, excellent as usual. Had not seen this particular author at American Thinker, but she’s a find!

[cripplecreek]

Wait till the emperor steps in and imposes a moratorium on them or something.

[wku man]

Nero fiddled, the Obammunist eats ice cream.

Scouts Out! Cavalry Ho!

[2ndDivisionVet]

American Thinker dsoesn't require excerpting. When I do as you described, readers complain that I made them go to another site... LOL

[garjog]

[TopQuark]

That's a part of the problem: these are not "hardship withdrawals" but I-don't-care-about-the-future withdrawals.

For almost two decades we as a nation have saved between 1% and -1%. Is it surprising that, when difficulties arose, that there is no other recourse?

[historyrepeatz]

It’s not about not caring about the future, it’s about feeling more sure there won’t be one.

[Jean S]

Two related videos from ABCNews.com:

Raiding your 401k

401K 'Hardship' Withdrawals Hit All-Time High

[raybbr]

That's a part of the problem: these are not "hardship withdrawals" but I-don't-care-about-the-future withdrawals.

Huh? You mean withdrawing money to pay the mortgage is "I don't care about the future"?

[raybbr]

I am seeing more posts getting away from excerpting.

Excerpting for a lot of news sites is required. It's the blogs that post one sentence and then expect you to go there to read the rest. I don't. If a blogger doesn't have enough respect for what he's written to post the whole thing then I don't bother giving them hits.

[who_would_fardels_bear]

But the Democrats were expecting to keep Medicare and Social Security solvent by taxing our 401k's.

What are they going to do now?

[JPG]

You scream, I scream, we all scream because of who is the president.

[raybbr]

The place I worked for went out of business two years ago. I have a 401K that I can raid completely by taking the payout. I am thinking about it.

There used to be stories about how the govt. was going to take over all 401K's and manage them. I haven't seen one in a while and that scares me.

[Grams A]

Am sure he is glad he said he wasn’t “going to rest until...” instead of saying “I’m not going to eat ice cream until...” or “I’m not going to play golf until...”

[Nepeta]

That's a part of the problem: these are not "hardship withdrawals" but I-don't-care-about-the-future withdrawals.

Uh, no, and I speak from first-hand experience. I'm using the money to keep the lights on and cheap food in the pantry. I care a lot about the future, but I still have bills, job or not.

[zigmeisterxiv]

On this topic it seems a little known fact is if you leave your job (quit OR fired) at age 55 or older, you may make withdrawals from your 401k at that firm WITH NO 10% PENALTY!

I state this not to advocate withdrawals but to make people aware they may be paying a penalty FOR NO REASON!!!

I even had this argument with this CPA broad in a bar. She kept saying no.. no.. no ..

So please refer to IRS Publication 575, and Form 5329 Instructions (line 2), to confirm this.

It does not apply to IRA’s and if your former employer’s plan made you roll it into one, you are screwed ... sorry.

Thanks for reading ...

[ponygirl]

Can you explain for me the difference between a 401k and an IRA?

[Grams A]

...these are not “hardship withdrawals” but I-don’t-care-about-the-future withdrawals.”

Cavuto was interviewing a guy about this same issue this week and Cavuto doesn’t agree totally with your premise. I believe he said something to the effect that perhaps they don’t trust the future or that the money will be available later when they really do need it. He also raised the issue of the amount of tax these people are going to have to pay if they are under 59 1/2 which is substantial and makes little sense unless you are really in a bind financially. I wonder if they are concerned about the future why they don’t just stop further contributions if such is possible.

[zigmeisterxiv]

I’m no accountant (as the CPA reminded me .. hahaha) but basically IRAs are retirement plans you open as an individual with a brokerage or other entity while 401ks (and 403b) are managed through your employer, and may be eligible for matching funds from the employer and other benefits.

There are other differences such as max allowed $$ contributions per year for each plan, whether loans are allowed, etc. At this point an expert should chime in.