Possible Changes In Tax Treatment Of 401(k) Plans

[Ndaccountant]

This won't end well if they follow thru with it.


Possible Changes In Tax Treatment Of 401(k) Plans

 

[ThePiombino]

This won't end well if they follow thru with it.


Possible Changes In Tax Treatment Of 401(k) Plans

Leave my 401k alone. kthxbye

 

[Sherm Sticky]

WTF!

 

[irishpat183]

And to think that there are people out there that contribute NOTHING to the system....yet get a check every month.

Allow me to opt out of SS if I want and refund me my money. Otherwise...leave my 401k alone! That is what i'm depending on when the government spending account hits zero and they just walk away and I'm left with a 401k that has been hammered.

thanks.

 

[Grahambo]

I'm lost.

 

[BleedBlueGold]

Are employer contributions currently not taxed as income? I guess I've never paid much attention to this.

I'm not sure I'm reading this correctly, but I have a huge problem with the government trying to "steal" money from people who are responsibly funding their retirements to support their future life and their family's lives.

 

[Ndaccountant]

Are employer contributions currently not taxed as income? I guess I've never paid much attention to this.

I'm not sure I'm reading this correctly, but I have a huge problem with the government trying to "steal" money from people who are responsibly funding their retirements to support their future life and their family's lives.

Yes, company match is not currently taxed UNTIL it is withdrawn, like the wages you save.

Also note that some companies also deposit a fixed amount into 401k's even if you do not contribute. My company provides a match % and also deposits 3-5% of total gross wages for the year depedning on your age.

 

[WaveDomer]

"Democracy is the theory that the common people know what they want, and deserve to get it good and hard." H.L. Mencken

 

[Ndaccountant]

"Democracy is the theory that the common people know what they want, and deserve to get it good and hard." H.L. Mencken

 

[WaveDomer]

This is the best one based on that joke, IMHO:

 

[NDFANnSouthWest]

****ing BS!

 

[Sherm Sticky]

Allow me to opt out of SS if I want and refund me my money. Otherwise...leave my 401k alone! That is what i'm depending on when the government spending account hits zero and they just walk away and I'm left with a 401k that has been hammered.

thanks.

^This

 

[WaveDomer]

And to think that there are people out there that contribute NOTHING to the system....yet get a check every month.

Allow me to opt out of SS if I want and refund me my money. Otherwise...leave my 401k alone! That is what i'm depending on when the government spending account hits zero and they just walk away and I'm left with a 401k that has been hammered.

thanks.

See, it's not acceptable, to those who know better, for you to be self-sufficient. You need to become dependent so people in government become necessary. They already do whatever they can do to make everyone believe they are essential. "The biggest election of our lifetime." "If we don't pass this stimulus it will be a disaster." "We are going over the fiscal cliff." Do me a favor, everyone in government, stop creating f-ing problems just so you can come up with a solution that causes more problems. Rinse and repeat.

 

[DSully1995]

And to think that there are people out there that contribute NOTHING to the system....yet get a check every month.

Allow me to opt out of SS if I want and refund me my money. Otherwise...leave my 401k alone! That is what i'm depending on when the government spending account hits zero and they just walk away and I'm left with a 401k that has been hammered.

thanks.

While I like this idea and would even do it for my canadian healthcare if possible, thats just what governments do, forceful redistribution...

And then everyone would opt out of what they dont believe in, id opt out of paying military fees if possible, same with alot of stuff...

EDIT: OH OH , you know what would be really cool? if you could choose like one department of program for which your tax dollars wouldnt be sent, up to a certain amount (so that people wouldnt just pick the largest spending department, imagine how wicked thatd be for everyone, Republicans shafting the EPA, Dems the military or whatever

 

[AFisch86]

It's a very real possibility. I work in the financial industry and I receive emails regarding this matter and others almost daily.

 

[Irish Houstonian]

While I like this idea and would even do it for my canadian healthcare if possible, thats just what governments do, forceful redistribution...

And then everyone would opt out of what they dont believe in, id opt out of paying military fees if possible, same with alot of stuff...

EDIT: OH OH , you know what would be really cool? if you could choose like one department of program for which your tax dollars wouldnt be sent, up to a certain amount (so that people wouldnt just pick the largest spending department, imagine how wicked thatd be for everyone, Republicans shafting the EPA, Dems the military or whatever

Social Security doesn't work the way you're thinking it does -- it's a separate account, with a separate tax designation which can only go toward specific distributions. It's designed just for retirement, as a separate line item. It's not like the "general gov't piggy bank" you're analogizing to. It can only be used for, and distribute funds toward, retirement saving (at least in theory...).

So with that in mind, I don't see why people shouldn't be able to opt-out of it, if they agree not to receive the benefits later.

 

[irishpat183]

And the biggest myth in this country is that SS is "guaranteed" or supposed to be your "retirement" account.....If only people read the damn statements in front of them.

I'd rather just be in charge of myself.

 

[ShamrockOnHelmet]

You get the government you deserve. Look at the idiots we elect. We should be exclusively voting for third parties and independents, or at the very least voting out I incumbents. Voting for democrats and republicans will get you this kind of sh!t.

 

[irishpat183]

You get the government you deserve. Look at the idiots we elect. We should be exclusively voting for third parties and independents, or at the very least voting out I incumbents. Voting for democrats and republicans will get you this kind of sh!t.

The government who robs Peter to pay Paul, can always depend on Pauls vote- Shaw


We have a WHOLE LOTTA Pauls.

 

[DSully1995]

Social Security doesn't work the way you're thinking it does -- it's a separate account, with a separate tax designation which can only go toward specific distributions. It's designed just for retirement, as a separate line item. It's not like the "general gov't piggy bank" you're analogizing to. It can only be used for, and distribute funds toward, retirement saving (at least in theory...).

So with that in mind, I don't see why people shouldn't be able to opt-out of it, if they agree not to receive the benefits later.

lame. but good to know.

 

[RDU Irish]

How many people are contributing more than $20K/year to 401ks? If you make a pile of money you are going to pay higher taxes with fewer and fewer places to hide, no news there.

Nothing here prohibits saving in a regular account for your retirement, you are just going to get taxed as you go on gains and income from those investments, and have less to save because your income will be taxed higher.

 

[Green Mountains]

As a government we continue to be looking at the wrong end of the telescope. Our tax code rewards the bad behaviors....spending...and disincents the good behaviors ...savings.

We have a savings problem in this country. Tens of thousands of baby boomers are retiring daily without enough money to support their retirement. They will need to liquidate their primary asset (their homes) in order to fund their retirement. Expect the housing market to continue to struggle for years as this trend continues.

Our tax code doesn't help matters. If you spend more for your house and borrow money for it, great -here's a tax deduction. But when we save, we tax the impact of it. Interest and dividend are taxable. Estate tax, sure....save for your heirs, the government will take a piece. But spend it all, and it's all good (forget if the government will need to support you in your final years).

Now 401k contributions might become currently taxable (btw - they are fully taxable when withdrawn currently). This is crazy. Let's further reduce our savings rate and increase the likelihood that more people won't have nearly enough money for their retirement.

Think of a tax code were savings is motivated by our tax code. Where, yes, interest on college debt is non deductible, but college savings is deductible. (So we don't burden our college grad with insane debt levels.) Where your interest income and your dividend income is non taxable. Where the tax code actually motivates debt reduction in your home (not the size of your interest deduction).

As long as our tax code motivates consumption (deductions and credits for spending) and penalizes savings (in the form of taxes), we will continue as a society to overspend and suffer from an inadequate savings rate.

There my rant for the day. And go Irish.

Your resident CPA.

 

[Green Mountains]

Social Security doesn't work the way you're thinking it does -- it's a separate account, with a separate tax designation which can only go toward specific distributions. It's designed just for retirement, as a separate line item. It's not like the "general gov't piggy bank" you're analogizing to. It can only be used for, and distribute funds toward, retirement saving (at least in theory...).

So with that in mind, I don't see why people shouldn't be able to opt-out of it, if they agree not to receive the benefits later.

This can't ever happen in our current structure. The current social security system IS the world largest ponzi scheme. Please look up what a ponzi scheme is. The government is using current collections to make current payments to retirees (ie in ponzi scheme terms, it's using current investors money to fund promises it made to prior investors).

We (The CBO) know that this program can not be sustained currently. In fact, we know the date it will fail (when the payments for promises made to prior investors will exceed the contributions of existing investors). If the government had to fund this program (call it a retirement program) as business must fund their retirement programs, it would be in receivership.

We need SS reform before it kills us. As a forty something, my retire savings plan includes me having no SS benefits. If you're younger than me...save more, consume less. Buy less house than you think you can afford. When you can afford to move, consider simply paying off your mortgage quicker. Drive you existing car a year or two longer and don't lease ever.

And Don't plan on social security. But hopefully, it won't come to that.

Sorry, I had another rant in me. Go Irish.

 

[NDinMich]

How many people are contributing more than $20K/year to 401ks? If you make a pile of money you are going to pay higher taxes with fewer and fewer places to hide, no news there.

Nothing here prohibits saving in a regular account for your retirement, you are just going to get taxed as you go on gains and income from those investments, and have less to save because your income will be taxed higher.

Thank you, I was starting to think I was the only one thinking this way. Phew, I'm not crazy.

 

[DSully1995]

This can't ever happen in our current structure. The current social security system IS the world largest ponzi scheme. Please look up what a ponzi scheme is. The government is using current collections to make current payments to retirees (ie in ponzi scheme terms, it's using current investors money to fund promises it made to prior investors).

We (The CBO) know that this program can not be sustained currently. In fact, we know the date it will fail (when the payments for promises made to prior investors will exceed the contributions of existing investors). If the government had to fund this program (call it a retirement program) as business must fund their retirement programs, it would be in receivership.

We need SS reform before it kills us. As a forty something, my retire savings plan includes me having no SS benefits. If you're younger than me...save more, consume less. Buy less house than you think you can afford. When you can afford to move, consider simply paying off your mortgage quicker. Drive you existing car a year or two longer and don't lease ever.

And Don't plan on social security. But hopefully, it won't come to that.

Sorry, I had another rant in me. Go Irish.

Reps

 

[no.1IrishFan]

The government who robs Peter to pay Paul, can always depend on Pauls vote- Shaw


We have a WHOLE LOTTA Pauls.

BA-ZING!!!

 

[Junkhead]

Without looking too deeply into it, my first thought was.....20k per year? pfft, I'll never have enough to contribute that much, oh well!

 

[ThePiombino]

Without looking too deeply into it, my first thought was.....20k per year? pfft, I'll never have enough to contribute that much, oh well!

Yeah, I'd have to be hauling in a solid $1/3 million in order to be contributing $20K on my 6% match plan. Not happening. Not in this world.

 

[Ndaccountant]

Without looking too deeply into it, my first thought was.....20k per year? pfft, I'll never have enough to contribute that much, oh well!

That is total contribution, not just personal. So, if your employer matches, it is $10,000. And yes, that $20k may seem like a lot, but people who are prudent with their money can get their with incomes less than $100k. (Yes, I know $100k is a lot of money, but we should encourage saving for retirement)

 

[4irishnation]