Re: Clinton Unveils Her Retirement Savings Plan
- From: mg <mgkelson@xxxxxxxxx>
- Date: Thu, 11 Oct 2007 10:07:30 -0700
On Oct 11, 10:44 am, rick++ <rick...@xxxxxxxxxxx> wrote:
Lots of modest income people cash in their 401Ks as soon as it
is "available", i.e right after leaving a job.
I can see the psychology of this- you may be without an income
between jobs, theres a few hundred or thousand sitting there,
and its decades until retirement - lots of time to save.
I wonder how the Hillary plan controls this?
Somebody could but a thousand in an IRA, get the match,
withdraw it all, pay taxes and penalty, and still be about $600 ahead.
A whole industry of low-income tax preparers has arisen to obtain
the similar current child credit. The preparer takes a significant
cut in preparers fees and advance-refund-loan fees, but the low income
parent still has few extra hundred they would have otherwise.
I think there's currently a 10% penalty for cashing in your 401K (plus
taxes). Presumably, the rules would change with her plan which is
similar, but different. It would certainly make sense to disallow
cashing these in.
I can remember when an 18 year old, could hire on at the local steel
plant and work there until he retired. Those days are gone obviously.
That's one reason why I prefer my plan of giving each newborn $5000
for a retirement account and then recouping the money from the
parent's tax returns.
.
- References:
- Clinton Unveils Her Retirement Savings Plan
- From: mg
- Re: Clinton Unveils Her Retirement Savings Plan
- From: rick++
- Clinton Unveils Her Retirement Savings Plan
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