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Joined: Dec 2013
Posts: 28,582 Likes: 587
a.k.a. Dingle Johnson
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a.k.a. Dingle Johnson
Joined: Dec 2013
Posts: 28,582 Likes: 587 |
While eating my bagel and drinking my coffee this morning I was reading that one of the changes coming out of the stimulus package was that penalty for early withdrawal of money from your 401k has been suspended. So now you can take money out of your 401k and only pay the taxes on it. I'm probably going to leave mine in and count on the recovery that I feel certain is going to happen and it will be a robust recovery. However I also wonder if it might not be a bad idea to pull some out and invest in real estate.... Or toilet paper, booze and cigarettes.  The only thing is, if you pull some out now, you lock in your losses. I just thought it was an interesting development, and the sad thing about it is that some people will pull a bunch out and totally screw up their retirement.
"When I say ever thing I mean ever thing." - Frankie
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Joined: Jul 2010
Posts: 9,908 Likes: 2
14 point
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14 point
Joined: Jul 2010
Posts: 9,908 Likes: 2 |
I think I'm about to pull some of mine out. You'll pay taxes, yes. Whether you pull it today or 20 years from now. I personally like to have control over my money. In my own brokerage account.
I don't really see it as locking in losses if you re-invest. The only loss will be the tax.
Last edited by Goatkiller; 03/31/20 09:07 AM.
No government employees were harmed in the making of this mess.
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Joined: Apr 2012
Posts: 579
4 point
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4 point
Joined: Apr 2012
Posts: 579 |
My employer sent an email that we could pull for COVID-19 realted expenses. I'll have to dig in to see if that's the case or not.
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Joined: Nov 2015
Posts: 14,515
Booner
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Booner
Joined: Nov 2015
Posts: 14,515 |
Aren't lump sum withdrawals taxed at a much higher rate? I used to get crushed when I got bonus checks.
"The true soldier fights not because he hates what is in front of him, but because he loves what is behind him."
-G. K. Chesterton
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Joined: Nov 2015
Posts: 21,456
Freak of Nature
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Freak of Nature
Joined: Nov 2015
Posts: 21,456 |
No way I am touching my retirement or equity in my house.
Isaiah 5:20 Woe to those who call evil good and good evil, who put darkness for light and light for darkness, who put bitter for sweet and sweet for bitter.
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Joined: Mar 2018
Posts: 16,939
Old Mossy Horns
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Old Mossy Horns
Joined: Mar 2018
Posts: 16,939 |
No way I am touching my retirement or equity in my house. Not smart but u do what u gotta do sometimes
They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.
Ben Franklin
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Joined: Jan 2016
Posts: 4,753
10 point
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10 point
Joined: Jan 2016
Posts: 4,753 |
No way I am touching my retirement or equity in my house.
A mans got to know his limitations.
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Joined: Mar 2012
Posts: 2,524
10 point
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10 point
Joined: Mar 2012
Posts: 2,524 |
Horrible idea for a couple reasons: 1) pull it and you lock in your losses 2) most folks don’t have enough for retirement already so now we’re going to encourage them to use retirement savings for non retirement purposes
"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not." Thomas Jefferson
"I ask, who are the militia? They consist of now of the whole people, except a few public officers." George Mason
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Joined: Mar 2018
Posts: 16,939
Old Mossy Horns
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Old Mossy Horns
Joined: Mar 2018
Posts: 16,939 |
They need to up the contribution amount along with this so people can catch back up quicker
They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.
Ben Franklin
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Joined: Jun 2015
Posts: 15,553 Likes: 89
Old Mossy Horns
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Old Mossy Horns
Joined: Jun 2015
Posts: 15,553 Likes: 89 |
They need to up the contribution amount along with this so people can catch back up quicker Most people don't max out their 401K as it already is, though I of course wouldn't complain if the max was higher. . "Only 13% of participants maxed out their 401(k) in 2017 (when the limit was $18,000), according to a 2018 Vanguard report about its investors." https://www.marketwatch.com/story/m...-may-be-easier-than-you-think-2019-03-05
Last edited by AU7MM08; 03/31/20 10:10 AM.
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Joined: Feb 2009
Posts: 4,469 Likes: 17
10 point
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10 point
Joined: Feb 2009
Posts: 4,469 Likes: 17 |
I think I'm about to pull some of mine out. You'll pay taxes, yes. Whether you pull it today or 20 years from now. I personally like to have control over my money. In my own brokerage account.
I don't really see it as locking in losses if you re-invest. The only loss will be the tax. It's a loss, and if you put it in a taxable account, you'll be paying yearly taxes on interest and dividends.
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Joined: Mar 2018
Posts: 16,939
Old Mossy Horns
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Old Mossy Horns
Joined: Mar 2018
Posts: 16,939 |
Ya but for small biz startups that r just starting to be profitable maybe borrowing from your plan is only way to keep doors open, I know it would make sense for my wife to do that cuz if she loses her biz which is becoming a great income vs losing retirement money it's a no brainer...but with increased contributions she could catch up in a few years..luckily her online sales is still booming despite closed doors but I know a lot that have dropped 75%
They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.
Ben Franklin
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Joined: Jan 2009
Posts: 7,780
14 point
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14 point
Joined: Jan 2009
Posts: 7,780 |
The people not contributing or contributing little has limited me in the past more than anything else. My yearly maximum contribution for years ran 10-12%.of pay.
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Joined: Nov 2008
Posts: 10,754 Likes: 5
Booner
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Booner
Joined: Nov 2008
Posts: 10,754 Likes: 5 |
Does it apply to a Roth IRA?
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Joined: Nov 2011
Posts: 22,626 Likes: 23
Freak of Nature
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Freak of Nature
Joined: Nov 2011
Posts: 22,626 Likes: 23 |
Does it apply to a Roth IRA? Roth is already after tax dollars. You can withdraw that at any time, and that’s always been true.
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Joined: Jun 2017
Posts: 7,118 Likes: 19
The Flippin’ Idiot That Could Care Less
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The Flippin’ Idiot That Could Care Less
Joined: Jun 2017
Posts: 7,118 Likes: 19 |
Aren't lump sum withdrawals taxed at a much higher rate? I used to get crushed when I got bonus checks. No. Bonus checks are taxed at 40%. Your 401k is not a bonus.
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Joined: Sep 2003
Posts: 13,688 Likes: 28
Booner
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Booner
Joined: Sep 2003
Posts: 13,688 Likes: 28 |
My employer sent an email that we could pull for COVID-19 realted expenses. I'll have to dig in to see if that's the case or not. That was my understanding also. Must be for Covid expenses
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Joined: Jan 2009
Posts: 7,780
14 point
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14 point
Joined: Jan 2009
Posts: 7,780 |
My employer sent an email that we could pull for COVID-19 realted expenses. I'll have to dig in to see if that's the case or not. That was my understanding also. Must be for Covid expenses Is buying land for social distancing a Corvid expense? Just so happens land is great hunting doesn't really mean anything.
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Joined: Dec 2008
Posts: 2,687
10 point
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10 point
Joined: Dec 2008
Posts: 2,687 |
My employer sent an email that we could pull for COVID-19 realted expenses. I'll have to dig in to see if that's the case or not. That was my understanding also. Must be for Covid expenses Is buying land for social distancing a Corvid expense? Just so happens land is great hunting doesn't really mean anything. Like the way you are thinking! 
"Never met a deer that I didn't like" - QDMAV8R
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Joined: Apr 2007
Posts: 3,932 Likes: 6
10 point
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10 point
Joined: Apr 2007
Posts: 3,932 Likes: 6 |
Anybody looking to invest in real estate send me a message or call me 256-653-0644. I have a great farm for sale that is a hunters and fisherman’s paradise.
REALTOR with Zeriss Realty
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