2005SUBMARINER Posted February 23, 2009 Report Share Posted February 23, 2009 man sounds attractive to withdraw 10k from my 401k without penalties . but do you guys think its a good plan ? this i copied from the net : Why I Don Quote Link to comment Share on other sites More sharing options...
digitalnrg Posted February 23, 2009 Report Share Posted February 23, 2009 man sounds attractive to withdraw 10k from my 401k without penalties . but do you guys think its a good plan ? this i copied from the net : Why I Don Quote Link to comment Share on other sites More sharing options...
dluddy Posted February 23, 2009 Report Share Posted February 23, 2009 Gets to the heart of the problem.....Self Discipline. The Government can't nor should it be expected to regulate Self Discipline... Can't afford the house....don't buy it Need liquidity for a special circumstance....withdraw YOUR money from YOUR 401-K... Defining the allowable circumstances or limiting the amount of allowable withdrawal might makes sense... Having been unemployed for an extended period now, a couple of things have not made sense to me.... I can collect Unemployment ( a fund which I have paid into my entire working life) but I need to pay Taxes on it Need to withdraw my money from my IRA Rollover....I have to pay taxes AND a Penalty for early withdrawal...Shouldn't extended unemployment in a recession be a good enough reason to waive the penalty? It is my money I earned, afterall Quote Link to comment Share on other sites More sharing options...
Nanuq Posted February 23, 2009 Report Share Posted February 23, 2009 Here's an idea: if you don't NEED the money for retirement right now, consider taking the $10k out, spend it on whatever you need to do, then repay yourself plus interest. Make the interest tax-deductible, and presto: your 401K is "earning" more than the market would otherwise produce (solves the opportunity cost problem) and the economy gets zillions of small jolts. Quote Link to comment Share on other sites More sharing options...
Shundi Posted February 23, 2009 Report Share Posted February 23, 2009 Here's an idea: if you don't NEED the money for retirement right now, consider taking the $10k out, spend it on whatever you need to do, then repay yourself plus interest. Make the interest tax-deductible, and presto: your 401K is "earning" more than the market would otherwise produce (solves the opportunity cost problem) and the economy gets zillions of small jolts. Very true... especially if you pay yourself back over time (be your own bank- so to speak)- beats paying Visa a fee to pay off that 10K over a few years!! Quote Link to comment Share on other sites More sharing options...
ThinkBachs Posted February 23, 2009 Report Share Posted February 23, 2009 Wrong approach. First, get rid of politicians that got us here to begin with. Taking money out will allow people to spend money that social security will have to work harder to support later, if it exists at all. Also, taking this money means less capital for companies, lowering stock prices even more and driving those companies that rely on it to go faster into bankruptcy because banks won't lend to them- especially with de-valued stocks. Those that are in trouble with their mortgages will only find this a short term solution. Overall, good for those that don't take the money out, they'll have more to invest when the others leave. Quote Link to comment Share on other sites More sharing options...
szvwj Posted February 23, 2009 Report Share Posted February 23, 2009 Two weeks ago I would have thought this was a great idea. I have since watched the show "Can you afford to retire" (http://www.pbs.org/wgbh/pages/frontline/retirement/). Basically, people suck at planning for retirement. I, personally, think more needs to be done to make people save for their retirement. I, for one, don't want to be supporting a bunch of old people who blew all of their money instead of putting it toward their retirement. Quote Link to comment Share on other sites More sharing options...
KB Posted February 24, 2009 Report Share Posted February 24, 2009 I, for one, don't want to be supporting a bunch of old people who blew all of their money instead of putting it toward their retirement. Do you mean the bunch of old people who spent their entire working lives paying taxes to support (amongst other things) a bunch of young people who didn't want to work? Ken Quote Link to comment Share on other sites More sharing options...
Demsey Posted February 24, 2009 Report Share Posted February 24, 2009 It is my money I earned, afterall I hear ya' D, it's gonna be a long, long, long four year term................... Quote Link to comment Share on other sites More sharing options...
digitalnrg Posted February 24, 2009 Report Share Posted February 24, 2009 Do you mean the bunch of old people who spent their entire working lives paying taxes to support (amongst other things) a bunch of young people who didn't want to work? Ken ++++ Dont forget, by the time you get older, the youngsters will think the same how you think right now. Quote Link to comment Share on other sites More sharing options...
fakemaster Posted February 24, 2009 Report Share Posted February 24, 2009 Anyone ever heard of self control? Well I guess if you were a dumbass got a variable rate mortgage when rates were on the way back up then I guess not. I am still trying to figure out what I'm going to do with my $13. OH WAIT! I won't even be getting that...nevermind. Quote Link to comment Share on other sites More sharing options...
chronoluvvv Posted February 24, 2009 Report Share Posted February 24, 2009 LoL, is the withdrawal limited to $10k because that is all some people have left in their accounts ? Quote Link to comment Share on other sites More sharing options...
Pugwash Posted February 24, 2009 Report Share Posted February 24, 2009 I, for one, don't want to be supporting a bunch of old people who blew all of their money instead of putting it toward their retirement. You obviously don't understand how pensions work. They're all Ponzi schemes by design. Quote Link to comment Share on other sites More sharing options...
Demsey Posted February 24, 2009 Report Share Posted February 24, 2009 You obviously don't understand how pensions work. They're all Ponzi schemes by design. And the US Social Security program as it stands................ Wow, it just dawned; what if W. succeeded in the privatization of the US Social Security? Hmmmm, maybe not so much, I forget the particulars of the Bill, but I don't think the entire entitlement would have been wrapped up in equities like the 401K? Meh, no matter................ But you know, not allowing people to withdraw or manage the 401K as a 'portfolio' (for younger demographics looking at decades of productive employment) probably saves them from themselves................if you maintain shares you can benefit from the eventual market incline. Too many, if allowed would panic and bail. Why I only maintain a very small amount of my own invested wealth in my direct control with no safe guard (an investment entity) as a buffer. Like mediation in divorce, you really should have to jump through hoops of those who 'know better' for your own best interest. For older participants in the program? Let their wealth of knowledge, or deficit thereof, having walked this world, be their guide. God Bless. Quote Link to comment Share on other sites More sharing options...
Pugwash Posted February 24, 2009 Report Share Posted February 24, 2009 Let their wealth of knowledge, or deficit thereof, having walked this world, be their guide. God Bless. Oh, I get it. You're one of those conservatives. Let 'em fail; serves 'em right. Screw 'em till they bleed; they should have paid more attention in shark-avoidance class. Fail. Quote Link to comment Share on other sites More sharing options...
HauteHippie Posted February 24, 2009 Report Share Posted February 24, 2009 If this "plan" gets implemented, I'll gladly divert an extra $10K in to a qualified 401(k), immediately withdraw it, and save myself the marginal rate on that $10K chunk of income. As will many others. Oops, nevermind. Misread the "plan". Wishful thinking. Quote Link to comment Share on other sites More sharing options...
Demsey Posted February 24, 2009 Report Share Posted February 24, 2009 Oh, I get it. No, no you obviously don't. Quote Link to comment Share on other sites More sharing options...
triplehd Posted February 24, 2009 Report Share Posted February 24, 2009 Wooooo...cant wait to withdrawal $10k. I got my eye a plenty of watches Maybe, if they allowed the US to rep watches, hand bags, etc., we would be contributing to the US economy and not the Chinese economy, right? Quote Link to comment Share on other sites More sharing options...
szvwj Posted February 24, 2009 Report Share Posted February 24, 2009 You obviously don't understand how pensions work. They're all Ponzi schemes by design. I have a problem with the way a LOT of companies fund their pension plans. PBGC 'encourages' companies to properly fund their pension plans, but have (foolishly) allowed too much flexibility in interpreting pension funding rules (identified in the Employee Retirement Income Security Act of 1974 [ERISA]). The funding rules are flawed, that's why PBGC is over $450 Billion in the hole (and growing fast). I know who's going to pay for that and I'm not happy. Unfortunately many pension plans (as well as Social Security) are underfunded, which is why (I'll say it again) more needs to be done to make people save for their retirement. Let me clarify by saying that I don't mean giving the money to the government or to an employer (I've seen what they do with it). I mean putting MORE money into a personal retirement account. If people take money out of their retirement accounts now (as referred to in the original post) it's just making a upcoming problem worse (they'll have even less money for retirement), and I know who's going to pay for that and I'm not happy. I agree with Fakemaster... SELF-CONTROL! And I'd just like to add... PLAN FOR YOUR FUTURE. Quote Link to comment Share on other sites More sharing options...
Demsey Posted February 24, 2009 Report Share Posted February 24, 2009 SELF-CONTROL! Indeed! But therein lies the rub. 'Control'. Is it inate? A learned behaviour? Easy for some, impossible for others? I can have 'no' beers. Easy! I can not have one beer. Like Federal Income Tax withholding. Some can take their entire check, bank the money, earn a small dividend through the year and pay tax in April. Others know themselves better and opt for withholding and a return, others see themselves as the former but just blow off their tax debt found short at tax time. It's convoluted. PLAN FOR YOUR FUTURE. Participation in the 401k program is voluntary. It has some good incentives, makes sense to good thinking/planning, and so people participate. To withdraw money pre-maturely goes against the philosophy of the 'plan', but some will do it frivolously or in unsubstantiated panic, or by 'loop hole' by design as Chief alluded given this opportunity. I have talked A LOT of friends into Roth's and IRA's, are determined, and are set. Others just join mutual funds and build up 30 to 50K and look similarly prepared toward retrirement. Then they just show up one day with a 911 Carerra. It basically comes down to personal responsibility and personal philosophy. Me? I'd rather live on potatoes and pasta, swinging a pick axe with 10K more in the bank, than have the money now and a 'hope' for a better unknown future. Still, it's subjective. There certainly are GREAT reasons to get behind, or in 'debt'; health, home, employment situations. I think 10K is enough of a bridge, but not enough for one 'too far'. I will say though, it is a rather 'Conservative' gesture on the part of this President. He's essentially saying; "You be the best judge for your concerns here with this offer. Take on the responsibility of the consequenses." It is indeed THEIR money. There certainly is NO re-distribution od wealth here. That bodes well for bi-partisanship. JFK would have done this. Cool. Quote Link to comment Share on other sites More sharing options...
HauteHippie Posted February 25, 2009 Report Share Posted February 25, 2009 Do you mean the bunch of old people who spent their entire working lives paying taxes to support (amongst other things) a bunch of young people who didn't want to work? Ken Yea, see what happens under a system of excessive taxation, regulation, and largesse? Everyone gets screwed. Quote Link to comment Share on other sites More sharing options...
szvwj Posted February 25, 2009 Report Share Posted February 25, 2009 The following words keep (painfully) coming to mind (Alexander Tyler, I think): A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage. Quote Link to comment Share on other sites More sharing options...
Demsey Posted February 25, 2009 Report Share Posted February 25, 2009 The following words keep (painfully) coming to mind (Alexander Tyler, I think): A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage. Yeah, that's a good one. But Churchill said it best. K'inell, Churchill said it ALL best; " A Democracy is the worst form of government. Until you consider the alternatives." Quote Link to comment Share on other sites More sharing options...
jonthebhoy Posted February 25, 2009 Report Share Posted February 25, 2009 As a saucy banker girlfriend from a previous life once said to me, "Early withdrawal loses interest". Quote Link to comment Share on other sites More sharing options...
Demsey Posted February 25, 2009 Report Share Posted February 25, 2009 As a saucy banker girlfriend from a previous life once said to me, "Early withdrawal loses interest". But she was quoting Churchill. Right? Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.