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Biden's 401(k) Plan Proposal
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mptnstr@44 Offline
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Post: #81
RE: Biden's 401(k) Plan Proposal
(01-13-2021 02:57 PM)U_of_Elvis Wrote:  I put $19.5k into 401k pre-tax and 26.5k into 401k post tax which including company match puts me at the 57k hard limit and give me a 19.5k deduction which saves me about 6300 in taxes.

The Biden plan would take away the deduction and give me a tax credit. I've seen two numbers for the credit, .20 and .26. At .20 I would pay an extra 1300 in taxes, and at .2 i would pay an extra 2300. I'm good with it if it encourages more retirement saving for low income individuals.

You should go ahead and write a check for those amounts right now.
No one is stopping you.
01-13-2021 08:02 PM
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mptnstr@44 Offline
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Post: #82
RE: Biden's 401(k) Plan Proposal
(01-13-2021 03:10 PM)U_of_Elvis Wrote:  
(01-13-2021 03:02 PM)Attackcoog Wrote:  
(01-13-2021 02:57 PM)U_of_Elvis Wrote:  I put $19.5k into 401k pre-tax and 26.5k into 401k post tax which including company match puts me at the 57k hard limit and give me a 19.5k deduction which saves me about 6300 in taxes.

The Biden plan would take away the deduction and give me a tax credit. I've seen two numbers for the credit, .20 and .26. At .20 I would pay an extra 1300 in taxes, and at .2 i would pay an extra 2300. I'm good with it if it encourages more retirement saving for low income individuals.

But it wont, because you as well as Biden dont understand basic economics. If you cant afford rent or a $400 unexpected expense----you arent failing to contribute to your 401K because the tax credit is too low. Your not contributing because you cant afford to contribute--and if you did come into a little bit of extra money---its not very likely the first option would be to place the extra money into an account you cannot access until 30 to 40 years in the future. Its a naked money grab---and thats all it is--plain and simple.

I know a lot of people who make enough to contribute to their 401k, but they spent their money on a nicer truck payment. Hopefully this will encourage savings in some of these people.

This legislation isn't going to change someone's priorities. If they want to spend money on the bigger truck rather than saving it no new 401K rules are going to change that. People either save or they don't. Government incentivizing behaviors that it prefers generally does not work.
01-13-2021 08:05 PM
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U_of_Elvis Offline
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Post: #83
RE: Biden's 401(k) Plan Proposal
(01-13-2021 08:02 PM)mptnstr@44 Wrote:  
(01-13-2021 02:57 PM)U_of_Elvis Wrote:  I put $19.5k into 401k pre-tax and 26.5k into 401k post tax which including company match puts me at the 57k hard limit and give me a 19.5k deduction which saves me about 6300 in taxes.

The Biden plan would take away the deduction and give me a tax credit. I've seen two numbers for the credit, .20 and .26. At .20 I would pay an extra 1300 in taxes, and at .2 i would pay an extra 2300. I'm good with it if it encourages more retirement saving for low income individuals.

You should go ahead and write a check for those amounts right now.
No one is stopping you.

It’s a rounding error in overall tax burden. I will still get a tax incentive for leveraging 401k, just smaller than previous years and someone else will get a bigger incentive. Not the end of the world as is being made out here.
01-13-2021 08:13 PM
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U_of_Elvis Offline
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Post: #84
RE: Biden's 401(k) Plan Proposal
(01-13-2021 08:05 PM)mptnstr@44 Wrote:  
(01-13-2021 03:10 PM)U_of_Elvis Wrote:  
(01-13-2021 03:02 PM)Attackcoog Wrote:  
(01-13-2021 02:57 PM)U_of_Elvis Wrote:  I put $19.5k into 401k pre-tax and 26.5k into 401k post tax which including company match puts me at the 57k hard limit and give me a 19.5k deduction which saves me about 6300 in taxes.

The Biden plan would take away the deduction and give me a tax credit. I've seen two numbers for the credit, .20 and .26. At .20 I would pay an extra 1300 in taxes, and at .2 i would pay an extra 2300. I'm good with it if it encourages more retirement saving for low income individuals.

But it wont, because you as well as Biden dont understand basic economics. If you cant afford rent or a $400 unexpected expense----you arent failing to contribute to your 401K because the tax credit is too low. Your not contributing because you cant afford to contribute--and if you did come into a little bit of extra money---its not very likely the first option would be to place the extra money into an account you cannot access until 30 to 40 years in the future. Its a naked money grab---and thats all it is--plain and simple.

I know a lot of people who make enough to contribute to their 401k, but they spent their money on a nicer truck payment. Hopefully this will encourage savings in some of these people.

This legislation isn't going to change someone's priorities. If they want to spend money on the bigger truck rather than saving it no new 401K rules are going to change that. People either save or they don't. Government incentivizing behaviors that it prefers generally does not work.

The entire concept of a 401k is the government encouraging retirement savings through tax deductions. It obviously works, plenty of people on this thread are talking about contributing, and are mad about their tax deduction potentially changing.

Biden’s plan is just changing the formula the obviously worked to incentivize behaviors and targeting the biggest benefit at a lower income bracket.
01-13-2021 08:19 PM
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maximus Offline
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Post: #85
RE: Biden's 401(k) Plan Proposal
(01-13-2021 08:19 PM)U_of_Elvis Wrote:  
(01-13-2021 08:05 PM)mptnstr@44 Wrote:  
(01-13-2021 03:10 PM)U_of_Elvis Wrote:  
(01-13-2021 03:02 PM)Attackcoog Wrote:  
(01-13-2021 02:57 PM)U_of_Elvis Wrote:  I put $19.5k into 401k pre-tax and 26.5k into 401k post tax which including company match puts me at the 57k hard limit and give me a 19.5k deduction which saves me about 6300 in taxes.

The Biden plan would take away the deduction and give me a tax credit. I've seen two numbers for the credit, .20 and .26. At .20 I would pay an extra 1300 in taxes, and at .2 i would pay an extra 2300. I'm good with it if it encourages more retirement saving for low income individuals.

But it wont, because you as well as Biden dont understand basic economics. If you cant afford rent or a $400 unexpected expense----you arent failing to contribute to your 401K because the tax credit is too low. Your not contributing because you cant afford to contribute--and if you did come into a little bit of extra money---its not very likely the first option would be to place the extra money into an account you cannot access until 30 to 40 years in the future. Its a naked money grab---and thats all it is--plain and simple.

I know a lot of people who make enough to contribute to their 401k, but they spent their money on a nicer truck payment. Hopefully this will encourage savings in some of these people.

This legislation isn't going to change someone's priorities. If they want to spend money on the bigger truck rather than saving it no new 401K rules are going to change that. People either save or they don't. Government incentivizing behaviors that it prefers generally does not work.

The entire concept of a 401k is the government encouraging retirement savings through tax deductions. It obviously works, plenty of people on this thread are talking about contributing, and are mad about their tax deduction potentially changing.

Biden’s plan is just changing the formula the obviously worked to incentivize behaviors and targeting the biggest benefit at a lower income bracket.
Go right ahead and voluntarily do it then

No thanks. The absolute gall to say, its just a little yada yada. Dude, again I dont work my dick off to have it taken from me....no matter the increment.

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01-13-2021 09:05 PM
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U_of_Elvis Offline
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Post: #86
RE: Biden's 401(k) Plan Proposal
(01-13-2021 09:05 PM)maximus Wrote:  
(01-13-2021 08:19 PM)U_of_Elvis Wrote:  
(01-13-2021 08:05 PM)mptnstr@44 Wrote:  
(01-13-2021 03:10 PM)U_of_Elvis Wrote:  
(01-13-2021 03:02 PM)Attackcoog Wrote:  But it wont, because you as well as Biden dont understand basic economics. If you cant afford rent or a $400 unexpected expense----you arent failing to contribute to your 401K because the tax credit is too low. Your not contributing because you cant afford to contribute--and if you did come into a little bit of extra money---its not very likely the first option would be to place the extra money into an account you cannot access until 30 to 40 years in the future. Its a naked money grab---and thats all it is--plain and simple.

I know a lot of people who make enough to contribute to their 401k, but they spent their money on a nicer truck payment. Hopefully this will encourage savings in some of these people.

This legislation isn't going to change someone's priorities. If they want to spend money on the bigger truck rather than saving it no new 401K rules are going to change that. People either save or they don't. Government incentivizing behaviors that it prefers generally does not work.

The entire concept of a 401k is the government encouraging retirement savings through tax deductions. It obviously works, plenty of people on this thread are talking about contributing, and are mad about their tax deduction potentially changing.

Biden’s plan is just changing the formula the obviously worked to incentivize behaviors and targeting the biggest benefit at a lower income bracket.
Go right ahead and voluntarily do it then

No thanks. The absolute gall to say, its just a little yada yada. Dude, again I dont work my dick off to have it taken from me....no matter the increment.

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Good luck with that.
01-13-2021 09:37 PM
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maximus Offline
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Post: #87
RE: Biden's 401(k) Plan Proposal
(01-13-2021 09:37 PM)U_of_Elvis Wrote:  
(01-13-2021 09:05 PM)maximus Wrote:  
(01-13-2021 08:19 PM)U_of_Elvis Wrote:  
(01-13-2021 08:05 PM)mptnstr@44 Wrote:  
(01-13-2021 03:10 PM)U_of_Elvis Wrote:  I know a lot of people who make enough to contribute to their 401k, but they spent their money on a nicer truck payment. Hopefully this will encourage savings in some of these people.

This legislation isn't going to change someone's priorities. If they want to spend money on the bigger truck rather than saving it no new 401K rules are going to change that. People either save or they don't. Government incentivizing behaviors that it prefers generally does not work.

The entire concept of a 401k is the government encouraging retirement savings through tax deductions. It obviously works, plenty of people on this thread are talking about contributing, and are mad about their tax deduction potentially changing.

Biden’s plan is just changing the formula the obviously worked to incentivize behaviors and targeting the biggest benefit at a lower income bracket.
Go right ahead and voluntarily do it then

No thanks. The absolute gall to say, its just a little yada yada. Dude, again I dont work my dick off to have it taken from me....no matter the increment.

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Good luck with that.
Typical leftist response

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01-13-2021 09:48 PM
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Owl 69/70/75 Offline
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Post: #88
RE: Biden's 401(k) Plan Proposal
I just cashed out my 401k.
01-13-2021 10:03 PM
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Claw Offline
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Post: #89
RE: Biden's 401(k) Plan Proposal
I got out years ago. Good financial decision? No. But it's my money to do with as I please when I please. For now at least.
01-13-2021 10:06 PM
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Attackcoog Online
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Post: #90
RE: Biden's 401(k) Plan Proposal
(01-13-2021 08:19 PM)U_of_Elvis Wrote:  
(01-13-2021 08:05 PM)mptnstr@44 Wrote:  
(01-13-2021 03:10 PM)U_of_Elvis Wrote:  
(01-13-2021 03:02 PM)Attackcoog Wrote:  
(01-13-2021 02:57 PM)U_of_Elvis Wrote:  I put $19.5k into 401k pre-tax and 26.5k into 401k post tax which including company match puts me at the 57k hard limit and give me a 19.5k deduction which saves me about 6300 in taxes.

The Biden plan would take away the deduction and give me a tax credit. I've seen two numbers for the credit, .20 and .26. At .20 I would pay an extra 1300 in taxes, and at .2 i would pay an extra 2300. I'm good with it if it encourages more retirement saving for low income individuals.

But it wont, because you as well as Biden dont understand basic economics. If you cant afford rent or a $400 unexpected expense----you arent failing to contribute to your 401K because the tax credit is too low. Your not contributing because you cant afford to contribute--and if you did come into a little bit of extra money---its not very likely the first option would be to place the extra money into an account you cannot access until 30 to 40 years in the future. Its a naked money grab---and thats all it is--plain and simple.

I know a lot of people who make enough to contribute to their 401k, but they spent their money on a nicer truck payment. Hopefully this will encourage savings in some of these people.

This legislation isn't going to change someone's priorities. If they want to spend money on the bigger truck rather than saving it no new 401K rules are going to change that. People either save or they don't. Government incentivizing behaviors that it prefers generally does not work.

The entire concept of a 401k is the government encouraging retirement savings through tax deductions. It obviously works, plenty of people on this thread are talking about contributing, and are mad about their tax deduction potentially changing.

Biden’s plan is just changing the formula the obviously worked to incentivize behaviors and targeting the biggest benefit at a lower income bracket.

That's about right. Remove an incentive from where it is working well and reapply it to a population that is largely unable to utilize it. lol....there ya have it--a 1000 foot view of Big Government whens its really hitting on all cylinders.
(This post was last modified: 01-13-2021 10:16 PM by Attackcoog.)
01-13-2021 10:07 PM
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maximus Offline
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Post: #91
RE: Biden's 401(k) Plan Proposal
(01-13-2021 10:07 PM)Attackcoog Wrote:  
(01-13-2021 08:19 PM)U_of_Elvis Wrote:  
(01-13-2021 08:05 PM)mptnstr@44 Wrote:  
(01-13-2021 03:10 PM)U_of_Elvis Wrote:  
(01-13-2021 03:02 PM)Attackcoog Wrote:  But it wont, because you as well as Biden dont understand basic economics. If you cant afford rent or a $400 unexpected expense----you arent failing to contribute to your 401K because the tax credit is too low. Your not contributing because you cant afford to contribute--and if you did come into a little bit of extra money---its not very likely the first option would be to place the extra money into an account you cannot access until 30 to 40 years in the future. Its a naked money grab---and thats all it is--plain and simple.

I know a lot of people who make enough to contribute to their 401k, but they spent their money on a nicer truck payment. Hopefully this will encourage savings in some of these people.

This legislation isn't going to change someone's priorities. If they want to spend money on the bigger truck rather than saving it no new 401K rules are going to change that. People either save or they don't. Government incentivizing behaviors that it prefers generally does not work.

The entire concept of a 401k is the government encouraging retirement savings through tax deductions. It obviously works, plenty of people on this thread are talking about contributing, and are mad about their tax deduction potentially changing.

Biden’s plan is just changing the formula the obviously worked to incentivize behaviors and targeting the biggest benefit at a lower income bracket.

That's about right. Remove an incentive from where it is working well and reapply it to a population that is largely unable to utilize it. lol....there ya have it---a thousand foot view of Big Government when its running smoothly.
Exactly

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01-13-2021 10:13 PM
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PlainTiger Offline
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Post: #92
RE: Biden's 401(k) Plan Proposal
(01-13-2021 08:13 PM)U_of_Elvis Wrote:  
(01-13-2021 08:02 PM)mptnstr@44 Wrote:  
(01-13-2021 02:57 PM)U_of_Elvis Wrote:  I put $19.5k into 401k pre-tax and 26.5k into 401k post tax which including company match puts me at the 57k hard limit and give me a 19.5k deduction which saves me about 6300 in taxes.

The Biden plan would take away the deduction and give me a tax credit. I've seen two numbers for the credit, .20 and .26. At .20 I would pay an extra 1300 in taxes, and at .2 i would pay an extra 2300. I'm good with it if it encourages more retirement saving for low income individuals.

You should go ahead and write a check for those amounts right now.
No one is stopping you.

It’s a rounding error in overall tax burden. I will still get a tax incentive for leveraging 401k, just smaller than previous years and someone else will get a bigger incentive. Not the end of the world as is being made out here.

It feels like the tip of the iceberg.
01-13-2021 10:32 PM
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Attackcoog Online
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Post: #93
RE: Biden's 401(k) Plan Proposal
(01-13-2021 04:44 PM)U_of_Elvis Wrote:  
(01-13-2021 03:26 PM)UofMTigerTim Wrote:  
(01-13-2021 03:14 PM)U_of_Elvis Wrote:  
(01-13-2021 03:10 PM)UofMTigerTim Wrote:  
(01-13-2021 03:02 PM)Attackcoog Wrote:  But it wont, because you as well as Biden dont understand basic economics. If you cant afford rent or a $400 unexpected expense----you arent failing to contribute to your 401K because the tax credit is too low. Your not contributing because you cant afford to contribute--and if you did come into a little bit of extra money---its not very likely the first option would be to place the extra money into an account you cannot access until 30 to 40 years in the future. Its a naked money grab---and thats all it is--plain and simple.

Exactly.

This proposed change is nothing but a way to tax the middle class in the disguise of helping the poor.

One of the only ways many middle class family's can build wealth and have a retirement is through a company sponsored 401k and Joe wants to screw with it to try and score political points.

How is this a tax to the middle class?

"But detractors of the proposal have noted it would reduce the tax benefit of traditional retirement accounts for married couples earning above $80,250 and earning under $400,000 -- violating the former vice president's pledge to not hike taxes on earners below the $400,000 threshold.

"This increases federal tax on any married couple earning more than $80,000," Paul Swanson, the vice president and head of intermediary distribution at CUNA Mutual Retirement Solutions, told FOX Business."

https://www.foxbusiness.com/economy/bide...ign-pledge

Is this at a .20 credit modifier or a .26? I’ve seen both thrown around, a .26 would be tax positive or neutral up to 320 something thousand married filing jointly.

If I remember correctly, Biden claimed his tax plan would not raise taxes on anyone making less than $400K. So, maybe work backwards using a credit factor that’s tax neutral up to $400K—-as opposed to assuming it has to be revenue neutral? That said, I pretty sure Biden’s full of crap on that $400K promise. Democrats always end up sliding their definition of “the rich” downward to include much of what most of us would call middle class.
(This post was last modified: 01-14-2021 03:53 AM by Attackcoog.)
01-14-2021 03:45 AM
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VA49er Offline
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Post: #94
RE: Biden's 401(k) Plan Proposal
(01-13-2021 10:03 PM)Owl 69/70/75 Wrote:  I just cashed out my 401k.

Do you mean you moved all your 401k money into a 401k cash account or did you just get a check? Thinking of taxes, etc.
01-14-2021 10:38 AM
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shere khan Offline
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Post: #95
RE: Biden's 401(k) Plan Proposal
(01-14-2021 03:45 AM)Attackcoog Wrote:  
(01-13-2021 04:44 PM)U_of_Elvis Wrote:  
(01-13-2021 03:26 PM)UofMTigerTim Wrote:  
(01-13-2021 03:14 PM)U_of_Elvis Wrote:  
(01-13-2021 03:10 PM)UofMTigerTim Wrote:  Exactly.

This proposed change is nothing but a way to tax the middle class in the disguise of helping the poor.

One of the only ways many middle class family's can build wealth and have a retirement is through a company sponsored 401k and Joe wants to screw with it to try and score political points.

How is this a tax to the middle class?

"But detractors of the proposal have noted it would reduce the tax benefit of traditional retirement accounts for married couples earning above $80,250 and earning under $400,000 -- violating the former vice president's pledge to not hike taxes on earners below the $400,000 threshold.

"This increases federal tax on any married couple earning more than $80,000," Paul Swanson, the vice president and head of intermediary distribution at CUNA Mutual Retirement Solutions, told FOX Business."

https://www.foxbusiness.com/economy/bide...ign-pledge

Is this at a .20 credit modifier or a .26? I’ve seen both thrown around, a .26 would be tax positive or neutral up to 320 something thousand married filing jointly.

If I remember correctly, Biden claimed his tax plan would not raise taxes on anyone making less than $400K. So, maybe work backwards using a credit factor that’s tax neutral up to $400K—-as opposed to assuming it has to be revenue neutral? That said, I pretty sure Biden’s full of crap on that $400K promise. Democrats always end up sliding their definition of “the rich” downward to include much of what most of us would call middle class.

In other words they frickin lie.
01-14-2021 10:40 AM
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shere khan Offline
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Post: #96
RE: Biden's 401(k) Plan Proposal
(01-13-2021 10:03 PM)Owl 69/70/75 Wrote:  I just cashed out my 401k.

You are not alone.
01-14-2021 10:41 AM
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U_of_Elvis Offline
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Post: #97
RE: Biden's 401(k) Plan Proposal
(01-14-2021 03:45 AM)Attackcoog Wrote:  
(01-13-2021 04:44 PM)U_of_Elvis Wrote:  
(01-13-2021 03:26 PM)UofMTigerTim Wrote:  
(01-13-2021 03:14 PM)U_of_Elvis Wrote:  
(01-13-2021 03:10 PM)UofMTigerTim Wrote:  Exactly.

This proposed change is nothing but a way to tax the middle class in the disguise of helping the poor.

One of the only ways many middle class family's can build wealth and have a retirement is through a company sponsored 401k and Joe wants to screw with it to try and score political points.

How is this a tax to the middle class?

"But detractors of the proposal have noted it would reduce the tax benefit of traditional retirement accounts for married couples earning above $80,250 and earning under $400,000 -- violating the former vice president's pledge to not hike taxes on earners below the $400,000 threshold.

"This increases federal tax on any married couple earning more than $80,000," Paul Swanson, the vice president and head of intermediary distribution at CUNA Mutual Retirement Solutions, told FOX Business."

https://www.foxbusiness.com/economy/bide...ign-pledge

Is this at a .20 credit modifier or a .26? I’ve seen both thrown around, a .26 would be tax positive or neutral up to 320 something thousand married filing jointly.

If I remember correctly, Biden claimed his tax plan would not raise taxes on anyone making less than $400K. So, maybe work backwards using a credit factor that’s tax neutral up to $400K—-as opposed to assuming it has to be revenue neutral? That said, I pretty sure Biden’s full of crap on that $400K promise. Democrats always end up sliding their definition of “the rich” downward to include much of what most of us would call middle class.

I looked and Biden hasn’t put a number for the credit multiplier on paper. Until this is a bill with the credit multiplier written down we won’t know where the income break point is for tax purposes. The higher the multiplier, the higher the income that this doesn’t impact. .26 looks like it wouldn’t impact married filing jointly under 320k.

At 320k AGI adding 19.5k to income and tax crediting at a .26 multiplier increases tax burden from 59k to 59.8k.
01-14-2021 11:49 AM
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stinkfist Offline
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Post: #98
RE: Biden's 401(k) Plan Proposal
(01-13-2021 10:03 PM)Owl 69/70/75 Wrote:  I just cashed out my 401k.

#smart!
01-14-2021 11:58 AM
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Attackcoog Online
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Post: #99
RE: Biden's 401(k) Plan Proposal
(01-14-2021 11:49 AM)U_of_Elvis Wrote:  
(01-14-2021 03:45 AM)Attackcoog Wrote:  
(01-13-2021 04:44 PM)U_of_Elvis Wrote:  
(01-13-2021 03:26 PM)UofMTigerTim Wrote:  
(01-13-2021 03:14 PM)U_of_Elvis Wrote:  How is this a tax to the middle class?

"But detractors of the proposal have noted it would reduce the tax benefit of traditional retirement accounts for married couples earning above $80,250 and earning under $400,000 -- violating the former vice president's pledge to not hike taxes on earners below the $400,000 threshold.

"This increases federal tax on any married couple earning more than $80,000," Paul Swanson, the vice president and head of intermediary distribution at CUNA Mutual Retirement Solutions, told FOX Business."

https://www.foxbusiness.com/economy/bide...ign-pledge

Is this at a .20 credit modifier or a .26? I’ve seen both thrown around, a .26 would be tax positive or neutral up to 320 something thousand married filing jointly.

If I remember correctly, Biden claimed his tax plan would not raise taxes on anyone making less than $400K. So, maybe work backwards using a credit factor that’s tax neutral up to $400K—-as opposed to assuming it has to be revenue neutral? That said, I pretty sure Biden’s full of crap on that $400K promise. Democrats always end up sliding their definition of “the rich” downward to include much of what most of us would call middle class.

I looked and Biden hasn’t put a number for the credit multiplier on paper. Until this is a bill with the credit multiplier written down we won’t know where the income break point is for tax purposes. The higher the multiplier, the higher the income that this doesn’t impact. .26 looks like it wouldn’t impact married filing jointly under 320k.

At 320k AGI adding 19.5k to income and tax crediting at a .26 multiplier increases tax burden from 59k to 59.8k.

Thats what I mean. What would the factor need to be in order to not impact those earning $400K a year or less (since that was Bidens campaign promise).
01-14-2021 12:45 PM
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RE: Biden's 401(k) Plan Proposal
(01-13-2021 10:03 PM)Owl 69/70/75 Wrote:  I just cashed out my 401k.

Are you retired or close?

Monte Carlo sims based on historical data normally support going into a bond tent near retirement to guard against sequence of return risks and burning that bond tent back to a 60/40 stock/bond mix over the first 5+ years of retirement.

If going to cash to market time then “Time in the market beats timing the market”. Dollar cost average and auto rebalance historically yields better results than market timing.

Bogleheads forum is good reading on the topic, heavily biased to passive index investing but for good reason.
01-14-2021 12:56 PM
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