Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. What’s That Mean?

[Doc7505]

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. What’s That Mean?​

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. Whatâs That Mean?

Will employers still sponsor retirement plans if tax deferral is removed? Plus: why retirement credit supporters are comparing apples and oranges.

www.forbes.com

25 Aug 2020 ~~ By Elizabeth Bauer

Round about a month ago, I took a closer look at Joe Biden’s retirement-related policy proposals, or, more specifically, those of the “Unity Task Force,” which had just released its final document.
One of the items in that document and on the Biden campaign website is a promise to “equalize the network of retirement saving tax breaks” — a proposal that generally translates to eliminating the tax advantages currently enjoyed by retirement savings accounts and replacing them with a “credit” or “match.” The idea is that the tax advantages, or “tax expenditures,” as they’re called, disproportionately accrue to relatively higher earners, and the hope of a change is to provide benefits in equal measure to all income groups.
But how this translates in practice is not clear. An article at Roll Call this morning picked up on the proposal, as did Courthouse News, but neither had more detail, referencing only a 2014 Urban Institute/Tax Policy Center proposal, which provided various hypothetical alternatives.
So what did that proposal suggest? It included a variety of options, including

• Reducing total available pre-tax savings (employer and employee) from (at the time) $51,000 to only the lesser of $20,000 or 20% of pay;
• Expanding the currently relatively-small “Saver’s Credit” (equal to 50% of the first $2,000 in retirement savings, only for relatively lower earners, up to $$19,500 for singles, $39,000 for couples; and phasing out quickly, to 20%, 10%, and ultimately nothing for singles with $32,500/couples with $65,000 in income) to stay at 50% for higher earners and phase out in a much more gradual manner instead; or
• Wholly removing any tax benefit for retirement savings and provide a credit of 25% instead (often this proposal includes a limit to the credit; this particular proposal doesn’t specify such; also, note that this was prior to the 2017 tax law which dropped tax rates).

Biden’s proposal sounds, well, fair enough. But what would happen, in practice?
Let’s start with a small point of clarification: strictly speaking, “401(k)” refers to the ability of a worker to defer a part of their pay for retirement savings purposes, and to avoid taxes until the money is ultimately withdrawn. The deferral of employer contributions is not a part of section 401(k) of the relevant IRS tax code. Does Biden want to remove the tax preference for both workers’ and employers’ contributions to retirement plans, or only the former?
The Urban Institute proposal assumed that higher-income workers would continue to save just as usual, even if they are on the losing end of tax changes. But would they continue to save through their employers’ 401(k)? And, likewise, if employers’ contributions no longer offered a tax advantage, would they continue to offer these plans, or to offer employer contributions to them?
Hard to follow? Here’s a table to illustrate:

Simplified illustration of tax impacts on retirement accounts -- OWN WORK


Comment:
China Joe Biden wants to dramatically reduce how much you can save for retirement in a 401(k). His next step if elected would be to end Social Security... "Biden wants to dramatically reduce how much you can save for retirement in a 401(k).
I think that's the best case. The worst case is confiscation."
China Joe is looking to tax your 401(k) and 403 (b) retirement plans on both ends, before yo save it and when to start taking it as a pension.
Democrat public employee unions invested their pensions with crooked connected pseudo-mafia parasites for years, resulting in dramatically underfunded pensions.
The time will come when firefighters and teachers need YOUR "subsidized" 401(k) for the sake of basic fairness.
They won't call it confiscation. It will just be a "millionaires tax" on withdrawals from an 401(k) that has more than say $250,000 in it. it will start small (maybe 3 or 4%) and then grow little by little to match the falloff in benefits for public union employees.

 

[Bootney Lee Farnsworth]

If you can't vote for Trump, vote for Jo, not Joe.

 

[MarathonMike]

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. What’s That Mean?​

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. Whatâs That Mean?

Will employers still sponsor retirement plans if tax deferral is removed? Plus: why retirement credit supporters are comparing apples and oranges.

www.forbes.com

25 Aug 2020 ~~ By Elizabeth Bauer

Round about a month ago, I took a closer look at Joe Biden’s retirement-related policy proposals, or, more specifically, those of the “Unity Task Force,” which had just released its final document.
One of the items in that document and on the Biden campaign website is a promise to “equalize the network of retirement saving tax breaks” — a proposal that generally translates to eliminating the tax advantages currently enjoyed by retirement savings accounts and replacing them with a “credit” or “match.” The idea is that the tax advantages, or “tax expenditures,” as they’re called, disproportionately accrue to relatively higher earners, and the hope of a change is to provide benefits in equal measure to all income groups.
But how this translates in practice is not clear. An article at Roll Call this morning picked up on the proposal, as did Courthouse News, but neither had more detail, referencing only a 2014 Urban Institute/Tax Policy Center proposal, which provided various hypothetical alternatives.
So what did that proposal suggest? It included a variety of options, including

• Reducing total available pre-tax savings (employer and employee) from (at the time) $51,000 to only the lesser of $20,000 or 20% of pay;
• Expanding the currently relatively-small “Saver’s Credit” (equal to 50% of the first $2,000 in retirement savings, only for relatively lower earners, up to $$19,500 for singles, $39,000 for couples; and phasing out quickly, to 20%, 10%, and ultimately nothing for singles with $32,500/couples with $65,000 in income) to stay at 50% for higher earners and phase out in a much more gradual manner instead; or
• Wholly removing any tax benefit for retirement savings and provide a credit of 25% instead (often this proposal includes a limit to the credit; this particular proposal doesn’t specify such; also, note that this was prior to the 2017 tax law which dropped tax rates).

Biden’s proposal sounds, well, fair enough. But what would happen, in practice?
Let’s start with a small point of clarification: strictly speaking, “401(k)” refers to the ability of a worker to defer a part of their pay for retirement savings purposes, and to avoid taxes until the money is ultimately withdrawn. The deferral of employer contributions is not a part of section 401(k) of the relevant IRS tax code. Does Biden want to remove the tax preference for both workers’ and employers’ contributions to retirement plans, or only the former?
The Urban Institute proposal assumed that higher-income workers would continue to save just as usual, even if they are on the losing end of tax changes. But would they continue to save through their employers’ 401(k)? And, likewise, if employers’ contributions no longer offered a tax advantage, would they continue to offer these plans, or to offer employer contributions to them?
Hard to follow? Here’s a table to illustrate:

Simplified illustration of tax impacts on retirement accounts -- OWN WORK


Comment:
China Joe Biden wants to dramatically reduce how much you can save for retirement in a 401(k). His next step if elected would be to end Social Security... "Biden wants to dramatically reduce how much you can save for retirement in a 401(k).
I think that's the best case. The worst case is confiscation."
China Joe is looking to tax your 401(k) and 403 (b) retirement plans on both ends, before yo save it and when to start taking it as a pension.
Democrat public employee unions invested their pensions with crooked connected pseudo-mafia parasites for years, resulting in dramatically underfunded pensions.
The time will come when firefighters and teachers need YOUR "subsidized" 401(k) for the sake of basic fairness.
They won't call it confiscation. It will just be a "millionaires tax" on withdrawals from an 401(k) that has more than say $250,000 in it. it will start small (maybe 3 or 4%) and then grow little by little to match the falloff in benefits for public union employees.

Democrats have been salivating at the prospect of getting their fingers into the massive 401K money pool for many years. It won't be Biden, it will be Pelosi, Shoomer, Shiff taking the knives to the best vehicle for average Americans financial security.

 

[theHawk]

Well destroying our economy will get rid of 401Ks, not to mention everyone’s bank accounts and real estate value. That IS the Democrat plan for America.

 

[BluesLegend]

Democrats have been salivating at the prospect of getting their fingers into the massive 401K money pool for many years. It won't be Biden, it will be Pelosi, Shoomer, Shiff taking the knives to the best vehicle for average Americans financial security.

Correct! I watched Pelosi drool over the prospect of seizing the deferred 401k and IRA tax money and going on a spending spree. These government pukes don't care that allowing our retirement savings grow tax deferred is a huge benefit. They care about nothing but taking OUR money and wasting it on shit.

 

[mudwhistle]

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. What’s That Mean?​

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. Whatâs That Mean?

Will employers still sponsor retirement plans if tax deferral is removed? Plus: why retirement credit supporters are comparing apples and oranges.

www.forbes.com

25 Aug 2020 ~~ By Elizabeth Bauer

Round about a month ago, I took a closer look at Joe Biden’s retirement-related policy proposals, or, more specifically, those of the “Unity Task Force,” which had just released its final document.
One of the items in that document and on the Biden campaign website is a promise to “equalize the network of retirement saving tax breaks” — a proposal that generally translates to eliminating the tax advantages currently enjoyed by retirement savings accounts and replacing them with a “credit” or “match.” The idea is that the tax advantages, or “tax expenditures,” as they’re called, disproportionately accrue to relatively higher earners, and the hope of a change is to provide benefits in equal measure to all income groups.
But how this translates in practice is not clear. An article at Roll Call this morning picked up on the proposal, as did Courthouse News, but neither had more detail, referencing only a 2014 Urban Institute/Tax Policy Center proposal, which provided various hypothetical alternatives.
So what did that proposal suggest? It included a variety of options, including

• Reducing total available pre-tax savings (employer and employee) from (at the time) $51,000 to only the lesser of $20,000 or 20% of pay;
• Expanding the currently relatively-small “Saver’s Credit” (equal to 50% of the first $2,000 in retirement savings, only for relatively lower earners, up to $$19,500 for singles, $39,000 for couples; and phasing out quickly, to 20%, 10%, and ultimately nothing for singles with $32,500/couples with $65,000 in income) to stay at 50% for higher earners and phase out in a much more gradual manner instead; or
• Wholly removing any tax benefit for retirement savings and provide a credit of 25% instead (often this proposal includes a limit to the credit; this particular proposal doesn’t specify such; also, note that this was prior to the 2017 tax law which dropped tax rates).

Biden’s proposal sounds, well, fair enough. But what would happen, in practice?
Let’s start with a small point of clarification: strictly speaking, “401(k)” refers to the ability of a worker to defer a part of their pay for retirement savings purposes, and to avoid taxes until the money is ultimately withdrawn. The deferral of employer contributions is not a part of section 401(k) of the relevant IRS tax code. Does Biden want to remove the tax preference for both workers’ and employers’ contributions to retirement plans, or only the former?
The Urban Institute proposal assumed that higher-income workers would continue to save just as usual, even if they are on the losing end of tax changes. But would they continue to save through their employers’ 401(k)? And, likewise, if employers’ contributions no longer offered a tax advantage, would they continue to offer these plans, or to offer employer contributions to them?
Hard to follow? Here’s a table to illustrate:

Simplified illustration of tax impacts on retirement accounts -- OWN WORK


Comment:
China Joe Biden wants to dramatically reduce how much you can save for retirement in a 401(k). His next step if elected would be to end Social Security... "Biden wants to dramatically reduce how much you can save for retirement in a 401(k).
I think that's the best case. The worst case is confiscation."
China Joe is looking to tax your 401(k) and 403 (b) retirement plans on both ends, before yo save it and when to start taking it as a pension.
Democrat public employee unions invested their pensions with crooked connected pseudo-mafia parasites for years, resulting in dramatically underfunded pensions.
The time will come when firefighters and teachers need YOUR "subsidized" 401(k) for the sake of basic fairness.
They won't call it confiscation. It will just be a "millionaires tax" on withdrawals from an 401(k) that has more than say $250,000 in it. it will start small (maybe 3 or 4%) and then grow little by little to match the falloff in benefits for public union employees.

I guess Joe is trying to lose the election.
He's intentionally trying to crash the stockmarket.

 

[Dogmaphobe]

He doesn't know what it means.

It is what his teleprompter told him to say.

 

[daveman]

Oh, look. The Democrat wants to raise taxes on the middle class.

Oh, gee, if ONLY someone had warned us this would happen!

 

[2aguy]

If you can't vote for Trump, vote for Jo, not Joe.

When the democrats first started talking about this scheme, it went something like this...

They take all the money in all the private retirement funds........and they invest them......in "infrastructure" projects...........then they give you a "guaranteed" retirement....just like they do with social security......The GRA , Guaranteed Retirement Accounts.......

They are not going to let you keep your retirement money...that makes you independent and they won't tolerate that...

 

[2aguy]

Democrats have been salivating at the prospect of getting their fingers into the massive 401K money pool for many years. It won't be Biden, it will be Pelosi, Shoomer, Shiff taking the knives to the best vehicle for average Americans financial security.

Correct! I watched Pelosi drool over the prospect of seizing the deferred 401k and IRA tax money and going on a spending spree. These government pukes don't care that allowing our retirement savings grow tax deferred is a huge benefit. They care about nothing but taking OUR money and wasting it on shit.

See...now that is just you being crazy...they are not going to "spend" that money....they are going to "invest" that money.........you know.....in their own pockets...

 

[Oddball]

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. What’s That Mean?​

Joe Biden Promises To End Traditional 401(k)-Style Retirement Savings Tax Benefits. Whatâs That Mean?

Will employers still sponsor retirement plans if tax deferral is removed? Plus: why retirement credit supporters are comparing apples and oranges.

www.forbes.com

25 Aug 2020 ~~ By Elizabeth Bauer

Round about a month ago, I took a closer look at Joe Biden’s retirement-related policy proposals, or, more specifically, those of the “Unity Task Force,” which had just released its final document.
One of the items in that document and on the Biden campaign website is a promise to “equalize the network of retirement saving tax breaks” — a proposal that generally translates to eliminating the tax advantages currently enjoyed by retirement savings accounts and replacing them with a “credit” or “match.” The idea is that the tax advantages, or “tax expenditures,” as they’re called, disproportionately accrue to relatively higher earners, and the hope of a change is to provide benefits in equal measure to all income groups.
But how this translates in practice is not clear. An article at Roll Call this morning picked up on the proposal, as did Courthouse News, but neither had more detail, referencing only a 2014 Urban Institute/Tax Policy Center proposal, which provided various hypothetical alternatives.
So what did that proposal suggest? It included a variety of options, including

• Reducing total available pre-tax savings (employer and employee) from (at the time) $51,000 to only the lesser of $20,000 or 20% of pay;
• Expanding the currently relatively-small “Saver’s Credit” (equal to 50% of the first $2,000 in retirement savings, only for relatively lower earners, up to $$19,500 for singles, $39,000 for couples; and phasing out quickly, to 20%, 10%, and ultimately nothing for singles with $32,500/couples with $65,000 in income) to stay at 50% for higher earners and phase out in a much more gradual manner instead; or
• Wholly removing any tax benefit for retirement savings and provide a credit of 25% instead (often this proposal includes a limit to the credit; this particular proposal doesn’t specify such; also, note that this was prior to the 2017 tax law which dropped tax rates).

Biden’s proposal sounds, well, fair enough. But what would happen, in practice?
Let’s start with a small point of clarification: strictly speaking, “401(k)” refers to the ability of a worker to defer a part of their pay for retirement savings purposes, and to avoid taxes until the money is ultimately withdrawn. The deferral of employer contributions is not a part of section 401(k) of the relevant IRS tax code. Does Biden want to remove the tax preference for both workers’ and employers’ contributions to retirement plans, or only the former?
The Urban Institute proposal assumed that higher-income workers would continue to save just as usual, even if they are on the losing end of tax changes. But would they continue to save through their employers’ 401(k)? And, likewise, if employers’ contributions no longer offered a tax advantage, would they continue to offer these plans, or to offer employer contributions to them?
Hard to follow? Here’s a table to illustrate:

Simplified illustration of tax impacts on retirement accounts -- OWN WORK


Comment:
China Joe Biden wants to dramatically reduce how much you can save for retirement in a 401(k). His next step if elected would be to end Social Security... "Biden wants to dramatically reduce how much you can save for retirement in a 401(k).
I think that's the best case. The worst case is confiscation."
China Joe is looking to tax your 401(k) and 403 (b) retirement plans on both ends, before yo save it and when to start taking it as a pension.
Democrat public employee unions invested their pensions with crooked connected pseudo-mafia parasites for years, resulting in dramatically underfunded pensions.
The time will come when firefighters and teachers need YOUR "subsidized" 401(k) for the sake of basic fairness.
They won't call it confiscation. It will just be a "millionaires tax" on withdrawals from an 401(k) that has more than say $250,000 in it. it will start small (maybe 3 or 4%) and then grow little by little to match the falloff in benefits for public union employees.

It means that the commie moonbat looters are coming for everyone's nest eggs.

 

[DGS49]

The only thing I see coming from the Left in the foreseeable future is a wealth tax on the corpus of 401k's above a certain amount. But that will be a difficult thing to even introduce; it is similar to attacking Social Security.

 

[two_iron]

You don't need a 401K under communism. I lived and worked in Russia for years and have a Russian wife. My inlaws worked their entire life (mostly under communism) and now receive about $350/month as pensioners. You marxist shitstains should spend 20 minutes with communist survivors like my inlaws. They would slap you silly for being so stupid.

 

[Winco]

wow.
The contarded MEMO got out in a hurry tonight.

So I'm doomed either way.
SS
401 K
Medicare

Is there ANY truth in the (R) talking points? or just FEAR.


Yup..........Just FEAR.

 

[EvilCat Breath]

Democrats have wanted to get rid of private retirement for a long time. They intend to fold private retirements into the social security fund. Instead of having two pension checks those with private insurance will have only one. The social security check. To democrats the retirement account holder would be relieved of making financial decisions. They would no longer have to rely on the advice of financial advisors. The government would take care of all those financial decisions for you. And when the retirement account holder dies.... Well. The government already has the entirety of the retirement accounts. There are no beneficiaries.

See what they want and why they want it.

 

[Jarlaxle]

The only thing I see coming from the Left in the foreseeable future is a wealth tax on the corpus of 401k's above a certain amount. But that will be a difficult thing to even introduce; it is similar to attacking Social Security.

I'm pretty sure that would not pass Constitutional muster.

 

[TroglocratsRdumb]

The Democrat Economic Motto
"Your Paycheck is My Paycheck"

 

[daveman]

The only thing I see coming from the Left in the foreseeable future is a wealth tax on the corpus of 401k's above a certain amount. But that will be a difficult thing to even introduce; it is similar to attacking Social Security.

I'm pretty sure that would not pass Constitutional muster.

Pfffft. Like Democrats give a shit about the Constitution.

 

[daveman]

The Democrat Economic Motto
"Your Paycheck is My Paycheck"