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Repubs taking aim at 401k contributions

By ThreeBays following x   2017 Oct 22, 5:31pm 4,439 views   53 comments   watch   sfw   quote     share    


https://www.nytimes.com/2017/10/20/us/politics/republicans-tax-401-k.html
The proposals under discussion would potentially cap the annual amount workers can set aside to as low as $2,400 for 401(k) accounts, several lobbyists and consultants said on Friday. Workers may currently put up to $18,000 a year in 401(k) accounts without paying taxes upfront on that money; that figure rises to $24,000 for workers over 50. When workers retire and begin to draw income from those accounts, they pay taxes on the benefits.
#politics
14   joeyjojojunior   ignore (1)   2017 Oct 23, 10:15am   ↑ like (0)   ↓ dislike (1)   quote   flag        

If Trump signs it, it's MAGA.

But if Trump doesn't sign it, it's also MAGA
15   WookieMan   ignore (0)   2017 Oct 23, 10:47am   ↑ like (0)   ↓ dislike (0)   quote   flag        

I didn’t read any of the links. This sound like pure rubbish though. Any legislator signing on to an idea like this would be commuting political suicide in my opinion. It would take $10k out of my pocket personally at the “new” 401k amounts listed.

While this amount wouldn’t devastate me, it will devestate the businesses I don’t elect to visit because I now don’t have that $10k to spend.

$100-$300k earners (families), in my opinion are the drivers of our economy. $100k and over is 20% of the population. You take money from the 100-300k range and GDP will hit a wall. Then factor in investment firms holding the 401k Money would lose massive fees. Then the companies that are no longer getting the money via stock purchases in those retirement accounts.

I’ve never bought into the fake news thing all that much. This idea sounds like pure propaganda to make one side look bad though. If it is actually true, any legislator that votes for it won’t get re-elected. Republican or Democrat.
16   joeyjojojunior   ignore (1)   2017 Oct 23, 12:09pm   ↑ like (0)   ↓ dislike (1)   quote   flag        

WookieMan says
I’ve never bought into the fake news thing all that much. This idea sounds like pure propaganda to make one side look bad though. If it is actually true, any legislator that votes for it won’t get re-elected. Republican or Democrat.


It was a trail balloon put out by the Trump campaign or Congressional Republicans. It obviously went over like a ton of bricks so it was quickly pulled back.
17   WookieMan   ignore (0)   2017 Oct 23, 12:19pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

PCGyver says
I must disagree with you on what your individual situation would be if a cap of $2,400 was instituted. A rough estimate is that you would have $10,000 more to spend now but also $15000 less in a retirement account that would be taxed later.

$18k - $3k =$15k *33% = $5k more to government now plus $10k burning a hole in your pocket.

Not sure I'm following the math here or may have misunderstood the OP. I mean my family. Both of our 401K's would be $36k total, my wife and I. 36,000 (current)-4,800 (new plan)= 31,200. So that's 31,200 that I have to pay taxes on right now. I'm well into the 28% tax bracket. So the way I look at it, it's being taxed at 28%, on all of it.

I was feeling a bit boisterous and did the math quick in my head and was off a little claiming the $10k number. $8,736 is now taken in taxes with this "new" plan. By putting the $31,200 into a 401k, I'm avoiding $8,736 in just federal taxes alone. I'd have to earn $39,936 to have the same savings amount in this plan when accounting for taxes. Throw in my state and I'm pretty close to $10k in tax avoidance. I'm making the $31,200 extra anyway. If the government says I can't put that much into a 401k, that's a $8,736 tax on me the way I look at it. That's huge.

I also don't intend a pay taxes on my 401k distributions during retirement for the most part. And if I do pay any taxes on it, it will be much, much less than the 28-33% I'd be paying now. Based on today brackets, there's no way I'd pay over 15%, ever. The hardest part is bridging the gap between 59-1/2 and maxing out your SS value. There may be a few years in there where you need more out of the 401k, but it would still be taxed less than 15% in my case.

For my personal situation if this reduction were to ever happen it would massively infuriate me. I would personally do anything within my legal means to make sure those that passed something like this never got elected again. I know quite a few people that would do the same.
18   anonymous   ignore (null)   2017 Oct 24, 5:31am   ↑ like (0)   ↓ dislike (1)   quote   flag        

Piggy can't save money?
19   bob2356   ignore (3)   2017 Oct 24, 5:55am   ↑ like (0)   ↓ dislike (0)   quote   flag        

PCGyver says
What proof do you have to back this up or is this just more fake news from the piggy?


No piggy got that one right, there are 25 million ira's and 100 million households.

But it's still a bullshit dunce hat piggy change the subject tap dance though. It matters a lot to the 25 million people who do save.
20   ThreeBays   ignore (0)   2017 Oct 24, 8:27am   ↑ like (0)   ↓ dislike (0)   quote   flag        

WookieMan says
I didn’t read any of the links. This sound like pure rubbish though. Any legislator signing on to an idea like this would be commuting political suicide in my opinion. It would take $10k out of my pocket personally at the “new” 401k amounts listed.

While this amount wouldn’t devastate me, it will devestate the businesses I don’t elect to visit because I now don’t have that $10k to spend.

$100-$300k earners (families), in my opinion are the drivers of our economy. $100k and over is 20% of the population. You take money from the 100-300k range and GDP will hit a wall. Then factor in investment firms holding the 401k Money would lose massive fees. Then the companies that are no longer getting the money via stock purchases in those retirement accounts.

I’ve never bought into the fake news thing all that much. This idea sounds like pure propaganda to make one side look bad though. If it is actually true, any legislator that votes for it won’t get re-elected. Republican or Democrat.


Senate Republicans already voted to repeal SALT deductions, which will take a lot of money from the upper middle class.

They call it closing a tax break for the rich, while taking the money to give a tax break for the mega-rich and corporations.
21   ThreeBays   ignore (0)   2017 Oct 24, 8:36am   ↑ like (0)   ↓ dislike (0)   quote   flag        

bob2356 says
PCGyver says
What proof do you have to back this up or is this just more fake news from the piggy?


No piggy got that one right, there are 25 million ira's and 100 million households.

But it's still a bullshit dunce hat piggy change the subject tap dance though. It matters a lot to the 25 million people who do save.


There are over 54 million people with 401ks. It's important because it incentivizes saving at the payroll level, whereas most people are bad at saving regularly without such plans.
22   joeyjojojunior   ignore (1)   2017 Oct 24, 10:47am   ↑ like (1)   ↓ dislike (1)   quote   flag        

me123 says
Do IRAs and 401Ks only apply to "households", or can a husband, wife and child each have their own accounts at their workplace, which means there can be MULTIPLE accounts per household?


Of course. My kids all started an IRA in preschool.
23   missing   ignore (1)   2017 Oct 24, 11:06am   ↑ like (2)   ↓ dislike (0)   quote   flag        

joeyjojojunior says
Of course. My kids all started an IRA in preschool.


Sarcasm unwarranted; me123's question was good.

My family has two 401 k, one 403 b, one IRA (rolled over), and three Roth IRA accounts, including one for my high school age kid, who puts there all money earned from odd jobs. Younger kids will follow suite.
24   joeyjojojunior   ignore (1)   2017 Oct 24, 11:22am   ↑ like (0)   ↓ dislike (0)   quote   flag        

FP says
My family has two 401 k, one 403 b, one IRA (rolled over), and three Roth IRA accounts, including one for my high school age kid, who puts there all money earned from odd jobs. Younger kids will follow suite.


Wow--I feel a little bad for your kids. I think it's probably OK for him to have some fun in high school and worry about retirement when he gets out of school?
25   missing   ignore (1)   2017 Oct 24, 11:41am   ↑ like (1)   ↓ dislike (0)   quote   flag        

joeyjojojunior says
FP says
My family has two 401 k, one 403 b, one IRA (rolled over), and three Roth IRA accounts, including one for my high school age kid, who puts there all money earned from odd jobs. Younger kids will follow suite.


Wow--I feel a little bad for your kids. I think it's probably OK for him to have some fun in high school and worry about retirement when he gets out of school?


Why? They are learning something valuable, get a great benefit down the road, and still have fun. I "reimburse" them for the money they put in their accounts.

A $ invested when you are 15 is worth a lot!
26   bob2356   ignore (3)   2017 Oct 24, 11:53am   ↑ like (0)   ↓ dislike (0)   quote   flag        

me123 says
Oh Bobby, why are you always so wrong?

Do IRAs and 401Ks only apply to "households", or can a husband, wife and child each have their own accounts at their workplace, which means there can be MULTIPLE accounts per household?


You know as well I I do they can. But most people only have 1.

Ok I'll play your really moronic game. How many households have multiple accounts and what does it have to do with the price of tea in china?
27   WookieMan   ignore (0)   2017 Oct 24, 12:01pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

FP says

Wow--I feel a little bad for your kids. I think it's probably OK for him to have some fun in high school and worry about retirement when he gets out of school?


Why? They are learning something valuable, get a great benefit down the road, and still have fun. I "reimburse" them for the money they put in their accounts.

A $ invested when you are 15 is worth a lot!

Have to agree with FP here. The amount of time to set up an account in rather nominal. Taking just one hour to set it up and learn about it could be one of the most valuable things a high school kid could learn. Since most kids do graduate high school, I would have to say we're failing our youth by not having more robust education around finances while they're in high school.

It's also not an either or scenario. You can set up an account, fund it from your high school jobs and still have fun. Wish I had done it that way. Even $500/yr from age 16 -22 gets compounded nicely by the time you can take distributions penalty fee at 59-1/2. That $3k can easily turn into $25-$40k by retirement time. It's not a ton in the grand scheme of what you need when you retire, but that's 2-4 kick ass vacation during retirement you can take with a significant other or grandchildren. Plus you learn the value of saving and will have likely gotten more aggressive as you see the growth of the money.
28   joeyjojojunior   ignore (1)   2017 Oct 24, 12:09pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

FP says
Why? They are learning something valuable, get a great benefit down the road, and still have fun. I "reimburse" them for the money they put in their accounts.


OK--I didn't get that you reimburse them for the money. It sounded like you were making them take all their fun money and invest it for retirement.

WookieMan says
It's also not an either or scenario. You can set up an account, fund it from your high school jobs and still have fun


Maybe you had better jobs than I did in high school. With car payment, gas, and insurance--didn't leave a bunch left over for weekend entertainment. Certainly not enough to fund an IRA with.
29   joeyjojojunior   ignore (1)   2017 Oct 24, 12:11pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

me123 says
FP says
joeyjojojunior says
Of course. My kids all started an IRA in preschool.


Sarcasm unwarranted; me123's question was good.


Tatty/Joey's only income is from trolling, so he wouldn't know a thing about retirement accounts.


You're the troll who always tries to make everything personal. Give it a rest.
30   zzyzzx   ignore (1)   2017 Oct 24, 12:14pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

FP says
A $ invested when you are 15 is worth a lot!


Yeah, that $1100 I invested in 1980 (or was it 1981) is now worth $97,600
31   joeyjojojunior   ignore (1)   2017 Oct 24, 12:17pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

zzyzzx says
Yeah, that $1100 I invested in 1980 (or was it 1981) is now worth $97,600


The S&P 500 is up ~20X since 1981. You must have invested very well.
32   WookieMan   ignore (0)   2017 Oct 24, 12:47pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

joeyjojojunior says
Maybe you had better jobs than I did in high school. With car payment, gas, and insurance--didn't leave a bunch left over for weekend entertainment. Certainly not enough to fund an IRA with.

In a lot of cases you're probably correct. It definitely is not easy to save at that age. I'd venture to guess though that 30-40% of people had some support from mommy and daddy regarding car, insurance, etc. Or live in an urban area with no need for a car. Of that group, I suspect less then 25% of those that had the help even saved anything, let alone had parents help with getting a 401k setup. This all excludes the super rich, trust fund type kids of course. Almost everyone will graduate high school and probably the most important stuff you need to know as an adult, isn't even taught. While parents need to be involved and do most of this, I do feel like schools fail in this regard.

Maybe things have changed. But high school in the late 90's there was NOTHING about finances. Credit cards, mortgages, 401K's, retirement, debt, etc. you know, the stuff that happens to real life adults. Instead it was an economics course, which of course is pretty much utterly useless to most high school students at the time and then when they become adults. I'd guess most kids and even a massive chunk of adults don't know how to balance a checkbook. They don't understand how credit card or mortgage interest works. They don't understand how to do their own taxes when they are a fucking single, basic W-2 employees and not itemizing. They'll pay H&R Block to have a tax return done that should be taught in 10th grade. It's rather embarrassing.
33   bob2356   ignore (3)   2017 Oct 24, 1:05pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

me123 says

Oh Bobby, doesn't it suck to be called out on your bullshit... again..

So, try and "spin" your fuckup back on me... Nice!!


So you don't have a clue.

Most non assholes, a club you will never be joining, would have simply said thank you for agreeing with my point that only 25% of people at most are saving instead of trying to make some non existent point.
34   ja   ignore (0)   2017 Oct 24, 2:18pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Luckily they haven't mentioned the Mega backdoor roth ira contribution. Hope they don't close the loophole!
35   bob2356   ignore (3)   2017 Oct 27, 5:57am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Sniper says
You're right, I don't have 3, I have 5.


HaHaHaHaHa. Sure. We also believe in santa clause and the easter bunny.




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