You can always apply for a hardship loan (you have to pay it back) if you meet certain conditions, they also allow penalty free withdrawal for home purchases and medical bills, all I can say as a newly retired person is I thank DOG that I never could have withdrawn money from my 401k like a checking account,
Since Biden took office, the middle class has been wrecked. The average cost of a home doubling, interest rates on loans more than tripling.
401(k)s Will Be Gone Within a Decade
The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.www.wealthmanagement.com
Had this link in a retirement related email I get weekly. I found it pretty interesting ..
If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.
I have been seeing more and more about this lately...and it all comes down to the Govt and money....
There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?
The 401(k) is not tax-free but what is known as tax-advantaged. Contributions made while working are not taxed, but participants pay taxes when they withdraw the money during retirement. Whether there is a big tax savings depends on the tax rate in retirement — which is usually lower because retirees tend to have lower earnings. Savers also avoid capital gains taxes on returns.
All of this cost the government an estimated $185 billion in 2019, or 0.9% of GDP. That’s not nothing. And in theory it’s justifiable because it creates a powerful incentive to save for retirement. More retirement savings have a triple benefit: for the economy overall, since they fuel growth; for the government, since retirees with income are less likely to be a burden on the state; and, of course, for workers who might not save enough today and regret it later.
Then again, maybe not. The first rumblings that the benefits of the tax breaks may be overstated came in a 2014 study of Danish savers. Without tax-advantaged accounts, it found, people just put their money in another kind of account. People did save more in retirement accounts, but that’s mostly because of automatic paycheck deduction. Subsequent research in other countries found similar results. Not only did the tax incentive fail to encourage more saving; the biggest beneficiaries tended to be the wealthy.
One alternative...
Enter the employer-sponsored liquid account. Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed. As these accounts grow in popularity, they may displace the 401(k). More liquid accounts, similar to a Roth IRA, have been become popular in Canada, and Canadians are saving more in them than in the tax-advantaged retirement accounts.
True. Big Gov't is the root of all Evil.
The government is still pushing people to invest more money in their 401Ks and IRAs. The reason being Social Security will have to start paying less in the future. Everything goverment does is encourage people to save more for retirement. Removing the tax advantage in retirement programs is self defeating. It will just ensure the collapse of social security.401(k)s Will Be Gone Within a Decade
The intellectual case for getting rid of tax-advantaged retirement plans is strong, and the political case is catching up.
Had this link in a retirement related email I get weekly. I found it pretty interesting ..
If you are among the 56% of US workers with a retirement plan, I have some bad news for you: Your 401(k) will be gone in 10 years, tops. Not the money, thank goodness — Americans have trillions of dollars in these accounts, and there is an entire industry built around them — but the plans themselves.
I have been seeing more and more about this lately...and it all comes down to the Govt and money....
There has been a brewing intellectual movement to get rid of the 401(k) for several years, with scholars on both the right and left questioning its value. And as the federal government gets increasingly desperate for new sources of revenue, the tax treatment of 401(k)s is a likely target. There are good policy reasons to end it, but the question remains: Will Americans still save for retirement?
The 401(k) is not tax-free but what is known as tax-advantaged. Contributions made while working are not taxed, but participants pay taxes when they withdraw the money during retirement. Whether there is a big tax savings depends on the tax rate in retirement — which is usually lower because retirees tend to have lower earnings. Savers also avoid capital gains taxes on returns.
All of this cost the government an estimated $185 billion in 2019, or 0.9% of GDP. That’s not nothing. And in theory it’s justifiable because it creates a powerful incentive to save for retirement. More retirement savings have a triple benefit: for the economy overall, since they fuel growth; for the government, since retirees with income are less likely to be a burden on the state; and, of course, for workers who might not save enough today and regret it later.
Then again, maybe not. The first rumblings that the benefits of the tax breaks may be overstated came in a 2014 study of Danish savers. Without tax-advantaged accounts, it found, people just put their money in another kind of account. People did save more in retirement accounts, but that’s mostly because of automatic paycheck deduction. Subsequent research in other countries found similar results. Not only did the tax incentive fail to encourage more saving; the biggest beneficiaries tended to be the wealthy.
One alternative...
Enter the employer-sponsored liquid account. Like a retirement account, it is funded by payroll deductions, but unlike a 401(k), it allows employees to withdraw money without a penalty when needed. As these accounts grow in popularity, they may displace the 401(k). More liquid accounts, similar to a Roth IRA, have been become popular in Canada, and Canadians are saving more in them than in the tax-advantaged retirement accounts.
While $600 a month might sound good now but with no provision for inflation, in 20 years that $600 might just buy the family a good dinner.
I am amazed at my friends over 60 who are still so highly exposed to the stock market. I didn't go all in to fixed income when I hit 60 but rather 30 percent stocks 70 percent fixed. Through stock appreciation the numbers are now more like 35/65.
If you are over 60 and you will be solely dependent on your investments for your retirement income it is very advisable to follow the formula, Percent in Stocks = 100-your age. Also keeping your withdrawal not more than 4% is a good idea, particularly in early years of retirement. However, if your retirement income will come mostly from other sources and you are heathy and expect a relatively long life, then putting more into equities in well a balanced portfolio would make sense. However, I would not put more than 75% in equities.
I've never had a financial advisor in my life. I did all my own investments be they stocks, fixed income, real estate, exotic birds, you name it I did it. It all worked out and have more than we need.
Don't know anything about your finances nor your retirement plans but here are few ideas that might help.
Good for You.
Other than attending various seminars on investing strategies and more recently asset management and social security, no paid advisors of any kind. And yes we started organizing and consolidating our stocks, DRPs, bonds etc into our primary bank and documenting everything in a spreadsheet. It's taken months, mostly by my wife who is far more organized than I am.
Covid started in 2020 then Russia invaded and my stocks took a long dump. Scared me. And how many years did it take to bounce back from the 2008 Great Recession? Years!
I just wish my condo dues were $150. In Jan. my dues when to $560 plus a $1,000 assessment. The cost of home maintenance has really gone up since Covid, mostly due to a shortage of skilled labor. I'm looking at a 75 foot ditch in our driveway due to some new plumbing pipes. We've been waiting nearly two months to get someone to fix the concrete.
Depending on your situation Trusts can be useful in financial planning. They can reduce taxes and make sure your money goes where and when you want it after your death. Also you can put stipulations on bequests that you can't in a will.
