It’s 10% PLUS your current tax rate which is probably higher than when you retire.
I find that people pull money out of 401K’s for another reason. They can’t stand the thought of having money and not spending it. Why else would you rather lose 40% of the account rather than make 5%?
“Yes Mr Bob, if you invest with me, I can promise a -40% return. You are guaranteed to lose money with me”
“Well slap my ass and call me Sally. Where do I sign?”
“Why else would you rather lose 40% of the account rather than make 5%?”
“Yes Mr Bob, if you invest with me, I can promise a -40% return. You are guaranteed to lose money with me”
Dinner time now...between my legs...have at it.
How about you treat people with a bit more RESPECT on this sit, particularly when you don’t know their details?
In my case, I can PROMISE you that I will, at least, be in the 25% bracket when I retire, simply because I have a REAL pension coming to me. So your 40% hit just dropped to 15%. From there, it winds up closer to 10%, due to my specifics.
You may be MORE THAN HAPPY to have your IRAs turn into “Annuities”, but I am not, and I will take steps, even costly ones, to NEVER let that happen. I will soon OWN my house here in Texas and NO ONE from the government will be able to do jack about it.