Posted on 10/08/2020 10:38:24 AM PDT by SJackson
Round about a month ago, I took a closer look at Joe Biden’s retirement-related policy proposals, or, more specifically, those of the “Unity Task Force,” which had just released its final document.
One of the items in that document and on the Biden campaign website is a promise to “equalize the network of retirement saving tax breaks” — a proposal that generally translates to eliminating the tax advantages currently enjoyed by retirement savings accounts and replacing them with a “credit” or “match.” The idea is that the tax advantages, or “tax expenditures,” as they’re called, disproportionately accrue to relatively higher earners, and the hope of a change is to provide benefits in equal measure to all income groups.
But how this translates in practice is not clear. An article at Roll Call this morning picked up on the proposal, as did Courthouse News, but neither had more detail, referencing only a 2014 Urban Institute/Tax Policy Center proposal, which provided various hypothetical alternatives.
So what did that proposal suggest? It included a variety of options, including
Reducing total available pre-tax savings (employer and employee) from (at the time) $51,000 to only the lesser of $20,000 or 20% of pay; Expanding the currently relatively-small “Saver’s Credit” (equal to 50% of the first $2,000 in retirement savings, only for relatively lower earners, up to $$19,500 for singles, $39,000 for couples; and phasing out quickly, to 20%, 10%, and ultimately nothing for singles with $32,500/couples with $65,000 in income) to stay at 50% for higher earners and phase out in a much more gradual manner instead; or Wholly removing any tax benefit for retirement savings and provide a credit of 25% instead ...snip...
(Excerpt) Read more at forbes.com ...
“Even if I get banged for 40% combined state and Fed taxes, it’s better than old Stinkfinger Joe taking all of it for his DNC chums.”
That will be the center of many discussions around the kitchen table or in the family room without the tv being on.
We took out a reverse mortgage 3 years ago, your paragraph above was a discussion with our CPA and trust lawyer.
If you don’t have a monthly mortgage payment and keep your house in good shape. You have lowered future utilities, upkeep and other homeowner costs.
So if Joe becomes president, you take out enough IRA money to put in long term investments in your home to make it more liveable with lower utilities and future upkeep like new roof, hvac systems, new storm windows and good paint jobs inside and outside your home.
One of my female in laws, still works in an office in her home. She has informed her husband,”If Joe is elected, that they will go for a reverse mortgage, fix up their home and take some expensive vacations. Their kids will have smaller inheritances.” They live in a midwest snow belt and spend about one winter month in the St Augustine area. If slo joe is elected, they will buy a trailer to spend the winter in and maybe longer for lower taxes. That can be tricky with a reverse mortgage.
And not taxing 401Ks until distribution. Nice!
...To clarify my post above...
Just to be clear, my Roth 401(k) does have a limit, but it’s much higher than the Roth IRA.
It means your screwed and he wi come got your savings
Yes definitely. ROTH is another good option.
I’d rather pay low taxes up front than high or “who knows” taxes at the back. But it’s really just a risk factor.
ping
“When can folks pull their money out without penalty?“
AFAIK, age 59.5
Not going to happen. Government employees have some of the best retirement plans on the planet. They also can contribute to 403b and 457 plans. There is no way FED congress can exclude those supplemental plans and target 401K plans...
The US retirement funds are the largest reserve of money on the planet.
If the DEMocratic Socialists ever steal power they will confiscate the funds to buy votes and power.
They will just blatantly take it or issue worthless government bonds in lieu of cash or inflate the value away to nothing.
“I think that might be a “red line” for a lot of people.”
Tens of millions older people with nothing to live for would be a seriously formidable mob.
The dims will follow the playbook of Hugo Chavez.
Mmmmmmph. Sounds like I better plant a lagger garden and get some chickens.
But the election won’t be over until December 19th.
This is what eliminating our 401k’s/IRA’s means.
Biden Affirms: “I Will Eliminate Your Student Debt”
10/8/2020, 10:35:44 AM · by SJackson · 52 replies
Forbes ^ | Adam S. Minsky, Esq.
Saving is racist, and it produces inequality of outcome because some people save and some don't. It is true that it is easier for higher income people to save; that will be the equity argument for removing incentives to save. Thrift savings plans will be replaced by a one size fits all plan that provides refundable tax credits to fund tax favored "savings" accounts for low income people -- just another income transfer system. Since you earn above the threshold, you will be allowed, out of your own pocket, to save the same amount in a tax favored plan. Your contributions will be capped at the welfare level, thus equalizing results.
“When can folks pull their money out without penalty?”
I have IRA’s and if they are taxed as 401k’s are then as soon as you reach 70.5 yrs of age you can withdraw whatever you want (there is a minimum you mast withdraw) but it is treated as income and taxed accordingly.
Good luck getting cash on the full amount. The bank questions every withdrawal over $499. make too many and you'll be on the LIST.
If they change the tax deductibility of traditional 401ks, the most likely response will be more people will choose Roth 401ks.
Antifa wants to loot their parents IRA's and 401-K's...BLM wants to do the same: loot the parents of Antifa thugs...
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