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?

The guy was involved in creating Obamacare, allowing H1N1 to run rampant, and depleted the PPE without repleneshing it. I dont want him anywhere near my 401K.

if ya didn't see this coming, you're living in a cave....

how else can debt be pd. to siphon mo' $$$....

it ain't biden, pal......that fk'r couldn't milk an elsie unless she was 13....

LEVELING

I like it.

Right now 401ks really don't offer any incentives for the people who need 401ks the most. This changes that.

The USA has the most progressive tax system in the world, and it's gotten more progressive during the last two major changes to the tax code (both under Republican presidents, by the way). I think that's a good thing.

(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?

Do you have a link to the details of his plan?

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.

(09-14-2020 12:58 PM)Redwingtom 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?

Do you have a link to the details of his plan?

do ewe...

(09-14-2020 12:58 PM)Redwingtom 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?

Do you have a link to the details of his plan?

I was just going off what I've read; however, I found the link below that may help. Not the actual plan but commentary on said plan.

Biden’s Proposal Would Shift the Distribution of Retirement Tax Benefits

(09-14-2020 01:03 PM)VA49er Wrote:  

(09-14-2020 12:58 PM)Redwingtom 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?

Do you have a link to the details of his plan?

I was just going off what I've read; however, I found the link below that may help. Not the actual plan but commentary on said plan.

Biden’s Proposal Would Shift the Distribution of Retirement Tax Benefits

Thanks. But you know as well as me, that once these things get through congress, they're never anything like the proposals.

I found this on his website:

Quote:IV. EQUALIZE SAVING INCENTIVES FOR MIDDLE-CLASS WORKERS

In the modern retirement landscape, a sound retirement begins with years of diligent saving. While other aspects of the Biden Plan will help raise wages for workers and reduce costs for spending like child care and health insurance, the Biden Plan will also ensure that middle-class families get a leg up as they grow their nest egg.

Under current law, the tax code affords workers over $200 billion each year for various retirement benefits – including saving in 401(k)-type plans or IRAs. While these benefits help workers reach their retirement goals, many are poorly designed to help low- and middle-income savers – about two-thirds of the benefit goes to the wealthiest 20% of families. The Biden Plan will make these savings more equal so that middle class families can enter retirement with enough savings to support a healthy and secure retirement. President Biden will do so by:

Equalizing the tax benefits of defined contribution plans. The current tax benefits for retirement savings are based on the concept of deferral, whereby savers get to exclude their retirement contributions from tax, see their savings grow tax free, and then pay taxes when they withdraw money from their account. This system provides upper-income families with a much stronger tax break for saving and a limited benefit for middle-class and other workers with lower earnings. The Biden Plan will equalize benefits across the income scale, so that low- and middle-income workers will also get a tax break when they put money away for retirement.
Removing penalties for caregivers who want to save for retirement. Under current law, people who work as caregivers without receiving wages are ineligible to get tax breaks for retirement saving. The Biden Plan will allow caregivers to make “catch-up” contributions to retirement accounts, even if they’re not earning income in the formal labor market, as has been proposed in bipartisan legislation by Representatives Jackie Walorski and Harley Rouda.

Giving small businesses a tax break for starting a retirement plan and giving workers the chance to save at work. As proposed by the Obama-Biden Administration, the Biden Plan will call for widespread adoption of workplace savings plans and offer tax credits to small businesses to offset much of the costs. Under Biden’s plan, almost all workers without a pension or 401(k)-type plan will have access to an “automatic 401(k),” which provides the opportunity to easily save for retirement at work – putting millions of middle-class families in the path to a secure retirement.

https://joebiden.com/older-americans/

Biden ain't planning anything other than putting ketchup on a duck because it's rainin.

Actually, the thing you really need to look out for is this...

What this does is acts as a 'voluntary' additional FICA tax on the lower and middle class. If you 'do without' enough to create a real nest egg, you will lose some or all of your social security benefits. This would especially be true for those born here who work their whole lives 'above the table' and much less so for those who work under the table or come here or enter the workforce later in life.

(09-14-2020 01:17 PM)shere khan Wrote:  Biden ain't planning anything other than putting ketchup on a duck because it's rainin.

Come on, man!! I got hairy legs and the kids rub them

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.

(09-14-2020 01:17 PM)shere khan Wrote:  Biden ain't planning anything other than putting ketchup on a duck because it's rainin.

I heard him actually say this. Or something just as intelligible.

(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.

You are correct.

I have a savings on the side to live off for the first two years of retirement before I touch my 401k. I still have 13 years to go and God willing I will be in better shape than most. Not rich by any stretch of the imagination but I should not go hungry. My main focus now is getting the house paid off. Then I am debt free.

(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.

In my previous job I utlilized a Roth 401k for the reasons you cite. However, in my latest job I've gone back to a regular\ 401k because I've decided I simply don't trust Congress to not mess with the tax laws going forward. Figure I'l take the tax savings now, well, unless Biden gets elected it seems.

Assuming he doesn't do away with ROTH 401k I'll just go that route. I've been taking advantage of the deferral, I'll just get it on the retirement side instead.

Thank you for this post. I hadn't looked at my 401k since everything started tanking at the beginning of the year. The investment I had 60% of my portfolio in had a -6% return for the year but the one I had 20% in had a 17% return for the year. Moved some things around and hopefully that return continues.

(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.

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.