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Biden's 401(k) Plan Proposal
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THE NC Herd Fan Offline
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Post: #21
RE: Biden's 401(k) Plan Proposal
(09-14-2020 06:02 PM)Eagleaidaholic Wrote:  Buy subdivision lots not in flood zones. No expenese other than taxes and maybe some grass cutting. Sit on it till there are no more lots available and you are ready to retire. Sell them as needed and pay only capital gains. Best savings account you can have. Buy one every couple of years. Can finance them now since rates are so low. The appreciation is more than the apr right now. Load up.

Last lot in my neighborhood 3/4 acre current asking price $125k, would love to know what the owners paid for it back in 1995. That said most developers won't sell the good lots to individuals only the ones they think no one will want.
09-14-2020 06:12 PM
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Post: #22
RE: Biden's 401(k) Plan Proposal
(09-14-2020 05:39 PM)chess Wrote:  
(09-14-2020 12:58 PM)Captain Bearcat Wrote:  Right now 401ks really don't offer any incentives for the people who need 401ks the most. This changes that.

Can you explain what you are meaning by this statement?

With a traditional 401k, a person's income is reduced dollar for dollar to what a person directs to the retirement account. This is an incentive.

Im not sure what this means either. I coached employees who were hesitant about joining our company 401K. There were in fact several that were able to defer income in the plan with a very small change to their paycheck. The problem IMO is education. People are very poorly schooled in personal finance today. What PARENTS used to teach their children..they now just defer to the poorly run government schools that do a HORRIBLE job of teaching this stuff. There is plenty of incentive to be in a 401k if someone is taught the philosophy behind them and understands the theory of dollar cost averaging. In fact...You have to be a damn fool NOT to be in one if offered to you.07-coffee3
09-14-2020 06:43 PM
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Fo Shizzle Offline
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Post: #23
RE: Biden's 401(k) Plan Proposal
(09-14-2020 02:14 PM)gdunn Wrote:  Here's what I've learned about 401(k)s.

It's good to pump money in them, but also build a secondary fund like a savings or Roth IRA that you pay taxes on as you put it in. When you retire and start pulling money from the 401(k) the taxes you'll be hit with will be in accordance with your previous tax return. So if you were making 6 figures when you retired, that's how your 401k will be taxed after retirement. If you can swing a Roth IRA, do it. You pay taxes as you put in and in 5 years, you can pull it out with no penalties. Same with retirement. If you can live on the IRA for a year or two without hitting your 401k, you'll be in a lower tax bracket and it'll last longer and get more bang for your buck.

When you're young be aggressive and as you get older start being a little more conservative.

And lastly taxation is theft.

Its all about dollar cost averaging. Nothing makes more money with less risk in the long run...and YES...Taxation is theft.
09-14-2020 06:46 PM
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Eagleaidaholic Offline
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Post: #24
RE: Biden's 401(k) Plan Proposal
(09-14-2020 06:12 PM)THE NC Herd Fan Wrote:  
(09-14-2020 06:02 PM)Eagleaidaholic Wrote:  Buy subdivision lots not in flood zones. No expenese other than taxes and maybe some grass cutting. Sit on it till there are no more lots available and you are ready to retire. Sell them as needed and pay only capital gains. Best savings account you can have. Buy one every couple of years. Can finance them now since rates are so low. The appreciation is more than the apr right now. Load up.

Last lot in my neighborhood 3/4 acre current asking price $125k, would love to know what the owners paid for it back in 1995. That said most developers won't sell the good lots to individuals only the ones they think no one will want.

Exactly. That's the ones you want. You get them for a discount. If the lot is in coveted subdivision in the future you make a lick. Every lot is buildable. Legal lot of record. Just meet setback requirements and covenants when improving it.
09-14-2020 07:19 PM
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chargeradio Offline
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Post: #25
RE: Biden's 401(k) Plan Proposal
(09-14-2020 05:39 PM)chess Wrote:  
(09-14-2020 12:58 PM)Captain Bearcat Wrote:  Right now 401ks really don't offer any incentives for the people who need 401ks the most. This changes that.

Can you explain what you are meaning by this statement?

With a traditional 401k, a person's income is reduced dollar for dollar to what a person directs to the retirement account. This is an incentive.
Under the current law, right now I am taxed on 80% of my salary with the last dollars of those 80% being taxed at a 12% marginal rate:

$0 - $12,400 at 0% = $0 (standard deduction)
$12,401 - $22,275 at 10% = $987.50
$22,275 - $46,000 at 12% = $2,847.00
$46,001 - $57,500 at 0% (retirement contribution)
Total tax = $3,474.50

Under Biden's plan, I would be taxed on 100% of my salary with the last dollars in the 22% tax bracket, but I would get a credit of 26% of the 20% I contribute:

$0 - $12,400 at 0% = $0 (standard deduction)
$12,401 - $22,275 at 10% = $987.50
$22,275 - $52,525 at 12% = $3,630.00
$52,526 - $57,500 at 22% = $1,094.50
Total tax = $5,712.00
Tax credit for retirement contribution: ($2,990.00)
Net tax = $2,722.00

I would expect the states with income taxes to keep doing it the current way, although Kentucky might be an exception given it has one individual income tax rate.

Contributions to a 401(k) are limited, so my main concern is this won't be revenue neutral, but may actually cut tax revenue. If you're making $500,000 or more, you're probably not worried too much about 11% on the $19,000 maximum you're putting in a 401(k), especially since an employer can put in nearly twice that amount.
09-14-2020 07:42 PM
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Fo Shizzle Offline
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Post: #26
RE: Biden's 401(k) Plan Proposal
(09-14-2020 07:42 PM)chargeradio Wrote:  
(09-14-2020 05:39 PM)chess Wrote:  
(09-14-2020 12:58 PM)Captain Bearcat Wrote:  Right now 401ks really don't offer any incentives for the people who need 401ks the most. This changes that.

Can you explain what you are meaning by this statement?

With a traditional 401k, a person's income is reduced dollar for dollar to what a person directs to the retirement account. This is an incentive.
Under the current law, right now I am taxed on 80% of my salary with the last dollars of those 80% being taxed at a 12% marginal rate:

$0 - $12,400 at 0% = $0 (standard deduction)
$12,401 - $22,275 at 10% = $987.50
$22,275 - $46,000 at 12% = $2,847.00
$46,001 - $57,500 at 0% (retirement contribution)
Total tax = $3,474.50

Under Biden's plan, I would be taxed on 100% of my salary with the last dollars in the 22% tax bracket, but I would get a credit of 26% of the 20% I contribute:

$0 - $12,400 at 0% = $0 (standard deduction)
$12,401 - $22,275 at 10% = $987.50
$22,275 - $52,525 at 12% = $3,630.00
$52,526 - $57,500 at 22% = $1,094.50
Total tax = $5,712.00
Tax credit for retirement contribution: ($2,990.00)
Net tax = $2,722.00

I would expect the states with income taxes to keep doing it the current way, although Kentucky might be an exception given it has one individual income tax rate.

Contributions to a 401(k) are limited, so my main concern is this won't be revenue neutral, but may actually cut tax revenue. If you're making $500,000 or more, you're probably not worried too much about 11% on the $19,000 maximum you're putting in a 401(k), especially since an employer can put in nearly twice that amount.

Honestly...If someone now can't understand that contributing to a 401k is a good thing for them and their future....Biden's plan is not going to make them understand it or contribute to one. I went through this mess in the 90's when our company started one. I had one HELL of a time making workers that were not making more than 7 dollars an hour and having trouble paying their bills to engage in this. It took extensive time and education to make it work even though in most cases they were simply just deferring taxes into their accounts with only a few dollars per week missing from their checks. Then after a few years...guess what happened? They constantly bitched an moaned because they could not take the money out without penalties. We had dumbasses that actually did just that. Im telling you. Without some level of education and discipline it a waste of time getting these people to get on board with this.
(This post was last modified: 09-14-2020 07:57 PM by Fo Shizzle.)
09-14-2020 07:54 PM
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VA49er Offline
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Post: #27
RE: Biden's 401(k) Plan Proposal
(09-14-2020 06:43 PM)Fo Shizzle Wrote:  
(09-14-2020 05:39 PM)chess Wrote:  
(09-14-2020 12:58 PM)Captain Bearcat Wrote:  Right now 401ks really don't offer any incentives for the people who need 401ks the most. This changes that.

Can you explain what you are meaning by this statement?

With a traditional 401k, a person's income is reduced dollar for dollar to what a person directs to the retirement account. This is an incentive.

Im not sure what this means either. I coached employees who were hesitant about joining our company 401K. There were in fact several that were able to defer income in the plan with a very small change to their paycheck. The problem IMO is education. People are very poorly schooled in personal finance today. What PARENTS used to teach their children..they now just defer to the poorly run government schools that do a HORRIBLE job of teaching this stuff. There is plenty of incentive to be in a 401k if someone is taught the philosophy behind them and understands the theory of dollar cost averaging. In fact...You have to be a damn fool NOT to be in one if offered to you.07-coffee3

If people don't understand free money I don't know what else one can do to educate them. It's not only low earners, I know people making 6 figures that don't participate in their 401k. Maybe they have better investment options elsewhere but it's hard to see what's better than free money. Of course, this is all contingent on if there is actually a company match.
09-15-2020 07:44 AM
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Post: #28
RE: Biden's 401(k) Plan Proposal
(09-15-2020 07:44 AM)VA49er Wrote:  
(09-14-2020 06:43 PM)Fo Shizzle Wrote:  
(09-14-2020 05:39 PM)chess Wrote:  
(09-14-2020 12:58 PM)Captain Bearcat Wrote:  Right now 401ks really don't offer any incentives for the people who need 401ks the most. This changes that.

Can you explain what you are meaning by this statement?

With a traditional 401k, a person's income is reduced dollar for dollar to what a person directs to the retirement account. This is an incentive.

Im not sure what this means either. I coached employees who were hesitant about joining our company 401K. There were in fact several that were able to defer income in the plan with a very small change to their paycheck. The problem IMO is education. People are very poorly schooled in personal finance today. What PARENTS used to teach their children..they now just defer to the poorly run government schools that do a HORRIBLE job of teaching this stuff. There is plenty of incentive to be in a 401k if someone is taught the philosophy behind them and understands the theory of dollar cost averaging. In fact...You have to be a damn fool NOT to be in one if offered to you.07-coffee3

If people don't understand free money I don't know what else one can do to educate them. It's not only low earners, I know people making 6 figures that don't participate in their 401k. Maybe they have better investment options elsewhere but it's hard to see what's better than free money. Of course, this is all contingent on if there is actually a company match.

which is why maxing Roth was my first choice with only a 3% match...I'll take tax free withdrawal every day until they fuxxor me...which I'm betting will happen if I live too long...

I've been out of the loop for 12 yrs. what corp. 'murica is matching as a standard these days...if 6% or higher, it would be worth going 401k first, Roth second....

I still do both if one makes enough and can budget within means...
09-15-2020 07:55 AM
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GrayBeard Offline
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Post: #29
RE: Biden's 401(k) Plan Proposal
(09-14-2020 01:00 PM)VA49er Wrote:  If I'm reading it right, the biggest impact will be that low-wage workers would be rewarded more than under current law and those in the top brackets less. Earnings would continue to grow tax free and withdrawals at retirement would continue to be taxed as regular income.

I already get no benefit from putting anything into an IRA, so sure...why not.
09-15-2020 08:06 AM
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EverRespect Offline
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Post: #30
RE: Biden's 401(k) Plan Proposal
Joe Biden did not come up with this.
09-15-2020 10:39 AM
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VA49er Offline
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Post: #31
RE: Biden's 401(k) Plan Proposal
(09-15-2020 10:39 AM)EverRespect Wrote:  Joe Biden did not come up with this.

Well, yeah, I figured that was a given.
09-15-2020 10:40 AM
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Hambone10 Offline
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Post: #32
RE: Biden's 401(k) Plan Proposal
(09-14-2020 07:42 PM)chargeradio Wrote:  Under Biden's plan, I would be taxed on 100% of my salary with the last dollars in the 22% tax bracket, but I would get a credit of 26% of the 20% I contribute:

Can you show me where you get such detailed information on this plan? Getting a 26% credit for a 20% contribution makes no fiscal sense... especially if your company is also matching say your first 6%.... and while this may work for you personally.... How many people making 56k before taxes do you think are putting 20% of their salary away?
09-15-2020 10:48 AM
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Redwingtom Offline
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Post: #33
RE: Biden's 401(k) Plan Proposal
(09-15-2020 10:48 AM)Hambone10 Wrote:  
(09-14-2020 07:42 PM)chargeradio Wrote:  Under Biden's plan, I would be taxed on 100% of my salary with the last dollars in the 22% tax bracket, but I would get a credit of 26% of the 20% I contribute:

Can you show me where you get such detailed information on this plan? Getting a 26% credit for a 20% contribution makes no fiscal sense... especially if your company is also matching say your first 6%.... and while this may work for you personally.... How many people making 56k before taxes do you think are putting 20% of their salary away?

No doubt, I was wondering the same thing...rarely are such details put forth ahead of any congressional debate..

Yeah, not me. I'm make substantially more than that and can only put away 3% currently.
09-15-2020 11:01 AM
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VA49er Offline
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Post: #34
RE: Biden's 401(k) Plan Proposal
(09-15-2020 11:01 AM)Redwingtom Wrote:  
(09-15-2020 10:48 AM)Hambone10 Wrote:  
(09-14-2020 07:42 PM)chargeradio Wrote:  Under Biden's plan, I would be taxed on 100% of my salary with the last dollars in the 22% tax bracket, but I would get a credit of 26% of the 20% I contribute:

Can you show me where you get such detailed information on this plan? Getting a 26% credit for a 20% contribution makes no fiscal sense... especially if your company is also matching say your first 6%.... and while this may work for you personally.... How many people making 56k before taxes do you think are putting 20% of their salary away?

No doubt, I was wondering the same thing...rarely are such details put forth ahead of any congressional debate..

Yeah, not me. I'm make substantially more than that and can only put away 3% currently.

For what it's worth, I've seen the 26% credit figure in a couple of different articles.
09-15-2020 11:09 AM
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UofMstateU Offline
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Post: #35
RE: Biden's 401(k) Plan Proposal
(09-15-2020 10:48 AM)Hambone10 Wrote:  
(09-14-2020 07:42 PM)chargeradio Wrote:  Under Biden's plan, I would be taxed on 100% of my salary with the last dollars in the 22% tax bracket, but I would get a credit of 26% of the 20% I contribute:

Can you show me where you get such detailed information on this plan? Getting a 26% credit for a 20% contribution makes no fiscal sense... especially if your company is also matching say your first 6%.... and while this may work for you personally.... How many people making 56k before taxes do you think are putting 20% of their salary away?

There's people turning down 3%-6% of their income in free money from the employer for a 401K match. So yea, not many people. Could probably number them on my left hand.
09-15-2020 11:19 AM
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VA49er Offline
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Post: #36
RE: Biden's 401(k) Plan Proposal
So, revisitng this now that the Dems will control everything. Anyone making any moves financially regarding retirement accts? Are there any moves to make? Just curious.....
01-13-2021 02:12 PM
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Attackcoog Offline
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Post: #37
RE: Biden's 401(k) Plan Proposal
(09-14-2020 12:40 PM)VA49er Wrote:  So, I've been reading up on Biden's 401(k) plan proposal. Apparently he thinks the current set up isn't "fair" because currently the size of the incentive is dependent on earnings. He proposes changing the tax incentive to save for retirement from a deduction to a flat, refundable tax credit. Of course, they make no mention of the fact that those same higher earners are shouldering a higher tax burden.

Thoughts?

Biden was a dummy before dementia ate the best part of his brain---so his idiotic proposal doesnt surprise me. He doesnt understand economics...or much of anything else--even his own campaign. This is a guy who ran on "unity"---yet somehow arrived at the conclusion that spending most of his first 100 days's pursuing a divisive impeachment of a president who is already gone is a great idea. As a nation, I fear we are in for what may be the worst 4 years since the Civil War.
(This post was last modified: 01-13-2021 02:24 PM by Attackcoog.)
01-13-2021 02:22 PM
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natibeast21 Offline
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Post: #38
RE: Biden's 401(k) Plan Proposal
(09-15-2020 07:55 AM)stinkfist Wrote:  
(09-15-2020 07:44 AM)VA49er Wrote:  
(09-14-2020 06:43 PM)Fo Shizzle Wrote:  
(09-14-2020 05:39 PM)chess Wrote:  
(09-14-2020 12:58 PM)Captain Bearcat Wrote:  Right now 401ks really don't offer any incentives for the people who need 401ks the most. This changes that.

Can you explain what you are meaning by this statement?

With a traditional 401k, a person's income is reduced dollar for dollar to what a person directs to the retirement account. This is an incentive.

Im not sure what this means either. I coached employees who were hesitant about joining our company 401K. There were in fact several that were able to defer income in the plan with a very small change to their paycheck. The problem IMO is education. People are very poorly schooled in personal finance today. What PARENTS used to teach their children..they now just defer to the poorly run government schools that do a HORRIBLE job of teaching this stuff. There is plenty of incentive to be in a 401k if someone is taught the philosophy behind them and understands the theory of dollar cost averaging. In fact...You have to be a damn fool NOT to be in one if offered to you.07-coffee3

If people don't understand free money I don't know what else one can do to educate them. It's not only low earners, I know people making 6 figures that don't participate in their 401k. Maybe they have better investment options elsewhere but it's hard to see what's better than free money. Of course, this is all contingent on if there is actually a company match.

which is why maxing Roth was my first choice with only a 3% match...I'll take tax free withdrawal every day until they fuxxor me...which I'm betting will happen if I live too long...

I've been out of the loop for 12 yrs. what corp. 'murica is matching as a standard these days...if 6% or higher, it would be worth going 401k first, Roth second....

I still do both if one makes enough and can budget within means...

The amount of people that are under 30 and don't utilize the Roth option their company offers blows my mind. These are companies offering the same match for traditional 401ks or Roth too SMH. Oh well.
(This post was last modified: 01-13-2021 02:37 PM by natibeast21.)
01-13-2021 02:35 PM
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Redwingtom Offline
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Post: #39
RE: Biden's 401(k) Plan Proposal
(01-13-2021 02:22 PM)Attackcoog Wrote:  
(09-14-2020 12:40 PM)VA49er Wrote:  So, I've been reading up on Biden's 401(k) plan proposal. Apparently he thinks the current set up isn't "fair" because currently the size of the incentive is dependent on earnings. He proposes changing the tax incentive to save for retirement from a deduction to a flat, refundable tax credit. Of course, they make no mention of the fact that those same higher earners are shouldering a higher tax burden.

Thoughts?

Biden was a dummy before dementia ate the best part of his brain---so his idiotic proposal doesnt surprise me. He doesnt understand economics...or much of anything else--even his own campaign. This is a guy who ran on "unity"---yet somehow arrived at the conclusion that spending most of his first 100 days's pursuing a divisive impeachment of a president who is already gone is a great idea. As a nation, I fear we are in for what may be the worst 4 years since the Civil War.

Well, pushing impeachment to the Biden administration is mostly all on Mitch.

But it's hardly going to consume 100 days. The last one only took 20 days total in the senate, and this one will likely last much much less.

Additionally, I've seen some proposals were the new Senate would split their time, working on impeachment for half a day and on other things like COVID relief and vaccine distribution improvement the other half of the day.
01-13-2021 02:38 PM
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UofMTigerTim Offline
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Post: #40
RE: Biden's 401(k) Plan Proposal
Quote:Additionally, I've seen some proposals were the new Senate would split their time, working on impeachment for half a day and on other things like COVID relief and vaccine distribution improvement the other half of the day.


That is all nice but the Senate must drop everything they are working on until the impeachment hearing is over.

https://www.heritage.org/political-proce...-need-know
01-13-2021 02:56 PM
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