Aldeer.com Forums Alabama Deer Talk Aldeer General Forum No Penalty on 401k Withdrawals

So the way I look at it is like this:

There is no real loss if you re-invest. Your 401(k) is getting reallocated as I type this by the fund managers. Using Aldeer logic... you are currently locking in your "losses". Surprise. The Joke is on you.

You can pay tax now instead of later but at this point avoiding the penalty gets it out of Gubbernment control and into your own hands. You pay taxes on it either way. Yearly or at the end when you take it out, etc. You say your tax bracket will be lower when you retire. You should have been a Democrat because you are good at throwing around blanket statements and apparently have a crystal ball. Your crystal ball is one of those 8 balls you can shake and the answer floats to the top. You don't know anything. If you were as smart as you think you are... you would have seen this pandemic coming and shorted the market and walked away with millions.

I can make more money.... with my own money.... in my own wallet. Not everyone can do that.... but I have never seemed to have that problem.

My losses have been minimal. I moved a lot of money around prior to this because I know people that live across the globe from doing international business for years. I was not bold enough to short the market but I did put a lot of money on the sidelines.

I think more pain is going to be delivered by our reaction to this pandemic. I think the damage this has done and will do to your economy is just getting started.

Part of an email from a CPA earlier today:

Taxpayers under 59 ½ who would normally be subject to a 10% early retirement penalty for withdrawals form their retirement accounts are also provided some relief. The early withdrawal penalty will not apply to a Coronavirus related distribution not to exceed $100,000.00 made during 2020. To be eligible, the distribution must be made after January 1, 2020 and before December 31, 2020 to an individual.

1) Who is diagnosed with the virus SARS-CoV2 or with COVID-19 by a test approved by the CDC.
2) Whose spouse or dependent is diagnosed with such virus by such test.
3) Who experienced adverse financial consequences as a result of being quarantined, being furloughed, laid off, or having work hours reduced due to such virus.
4) Unable to work due to lack of childcare due to the virus or closing or reducing hours of a business due to the virus.

The taxpayer may at any time during a 3-year period beginning on the day after the distribution make one or more contributions not to exceed the distribution to an eligible retirement plan of which the taxpayer is a beneficiary. Alternatively, the taxpayer may elect to have the distribution included in income ratably over the 3-year period beginning in 2020.

For taxpayers in 401 K plans, the act doubled the amount of loans a taxpayer who has been diagnosed with the virus or affected by economic loss can take in loans in the next 6 months from their account. They may be able to borrow the lower of $100,000.00 or 100% of the account balance. Taxpayers with either new or existing 401 K loans can delay repayment due in 2020 for a year.

Based on the above it might be smarter to take out a loan from your 401k to purchase property or another investment.

If folks start selling off the investments of their 401k so they can cash it out, really gonna hit the market more than this already has.

hmm wonder if that works on a 403B

My wife sells the platforms and after she explained it to me it looks like a way to move 401k monies to an IRA without a penalty. Seems crazy that they allow you to put the money back into "an eligible retirement plan of which the taxpayer is a beneficiary" instead of back to the 401k from which it was withdrawn.