obama economic plan- early withdrawal from 401k's

[mopinko]

dh said he heard this on npr, but here is a link to a print story

smart idea. 401k's are the biggest gift wall street ever got. so many folks are just sitting around watching their retirement sink, unable to do anything. at least we ought to be able to get a little money out if we need it. before it disappears.
the proposal is for 15%, up to $10k to pay debts.

[Davis_X_Machina]

1. Public sector folks...

...tend to have 403(b)'s which are far less flexible. Anything on them?

[mopinko]

4. don't see it, but

can't imagine that they wouldn't be included. jesus, i don't know how some teachers keep food on the table.

[Extend a Hand]

8. he said IRA or 401K

so maybe the 403b's are included as well

[LittleClarkie]

2. I'd love that

and we'd be paying our debts with what is our own money.

But alittle of that would go a long way. I also want retirement money as well.

[mopinko]

6. we have taken out 401k loans, but

the payback schedules are tight. it is nice to borrow from yourself, tho. and if DH were to lose his job, loans are paid before the account is rolled over. no debts hanging there while unemployed. (not much chance, tho. he is in one of those business where bad news is good.)

[Lost-in-FL]

3. I am so exited about this...

can't wait!!! Pay the bills and going on a loooong trip after school.

[mopinko]

5. not sure how far you can get on $10k, but

more power to you if you can do both. i am wondering how this will work. i am tempted to shuffle some money around to make sure we are eligible.

[Lost-in-FL]

9. I'm sure it isn't $10k per household

So if there's 2 people that's $20K!! PARTY!!!!

[mopinko]

12. hope you are right.

that money feels like it is just sitting there waiting to be stolen.

[Lost-in-FL]

20. Tell me about it!!!

Can't wait.

[myrna minx]

7. If I could loan myself $10,000 from my 401K, it would completely change my life.

I seriously hope this comes to pass. (Assuming that I have anything left in my 401K, I haven't received my statement yet)

[mopinko]

11. we are pretty good so far.

because i saw this shit coming in 2000. took a little longer to get here than i thought. but we moved into a more cash oriented position 6 months ago. we lost some, but not that much.
our plan has a lot of options, tho. so we were able to do that. i feel real sorry for people who can only invest in their own company's stock. that shit should be outlawed.

[vaberella]

10. I believe in the 30 minute tv spot Obama bought he'll be expanding on this idea

and throughout the rest of the campaign. This would be a great idea for all Americans. It's basically a nest egg for emergencies and this would be great for the people who are in debt now. Damn the rest of the idiots in Washington they don't have one inkling.

[mopinko]

14. that money SHOULD be working for us.

you can take out a mortgage for a first home, but you cannot take out a second mortgage. that is just fucking stupid, and in there for the banks. we would have done some extensive remodeling years ago it we could have done that. (including energy improvements!) Dh has 20 years to go till retirement. it is great to have a nest egg, but there are too many egg sucking dogs watching that egg.

[vaberella]

13. Here's some K*R this thread deserves.

:kick:

[mopinko]

17. thank you.

i gotta go to work now. please kick while i am gone. i think that this in not only important, but so indicative of the kind of common sense that president obama brings to the table.

[leeno]

15. I'm sure you would still have to pay taxes though

maybe you could defer 50% for an extra year

[mopinko]

16. hey, they could exempt it if they want.

as george bush has taught us, the potus can do anything they want.

[leeno]

18. I don't see tax-free withdrawals happening

then everybody would be stupid to not take $10K free out and put it into a Roth IRA (1/2 this year, 1/2 next year)

sure you could get the whole $10K w/o tax being withheld, but come April 15th people would be scrambling....

I'm interested to hear more details for sure

[mopinko]

21. i dunno.

not withheld an not taxed are obviously 2 different things. not withheld is worthless. but they could very easily just declare this non-taxable.

[AzNick]

19. Maybe not the best time to cash out...

You should not cash out when it is at the lowest, frankly.

I do not think 401ks are a bad thing. It depends on what is available on your plan and how much your employer gives.

[mopinko]

22. ya gotta do what you gotta do.

not the best time for many. but money is money, and even if it realizes a loss, it is still cash to pay the bills.