Should 401ks be phased out?

[Anonymous]

Anonymous wrote:

Anonymous wrote:401k should not transfer tax liability to a new state. It is deferred compensation and should be taxed in the state where it was earned, like CA does for RSU awards.

401k is for the MC/UMC, not the rich.

I agree with this. There are significant disadvantages with 401ks/IRAs - Withdrawals are taxed at future income tax rates (which are not known). RMDs force you to withdraw and be taxed whether you need the money or not. Inherited IRAs have to be liquidated within 5 years (at income tax rates). You can't claim losses on investments in IRAs/401ks...

It's 10 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:401k should not transfer tax liability to a new state. It is deferred compensation and should be taxed in the state where it was earned, like CA does for RSU awards.

401k is for the MC/UMC, not the rich.

I agree with this. There are significant disadvantages with 401ks/IRAs - Withdrawals are taxed at future income tax rates (which are not known). RMDs force you to withdraw and be taxed whether you need the money or not. Inherited IRAs have to be liquidated within 5 years (at income tax rates). You can't claim losses on investments in IRAs/401ks...

I agree. For all the reasons above, they're not a good tool for intergenerational wealth transfer. Add that contribution limits are relatively low. They are designed for MC and UMC to save for retirement in lieu of pensions.

They were meant as a replacement for pensions. If you’re looking to pass on wrath to future generations it’s not the most efficient tool(

[Anonymous]

Anonymous wrote:401k should not transfer tax liability to a new state. It is deferred compensation and should be taxed in the state where it was earned, like CA does for RSU awards.

401k is for the MC/UMC, not the rich.

Over a 35 year career I worked in five states while contributing to a 401k. Good luck with your idea.

[Anonymous]

I would rather see the social security cap eliminated first.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:401k should not transfer tax liability to a new state. It is deferred compensation and should be taxed in the state where it was earned, like CA does for RSU awards.

401k is for the MC/UMC, not the rich.

I agree with this. There are significant disadvantages with 401ks/IRAs - Withdrawals are taxed at future income tax rates (which are not known). RMDs force you to withdraw and be taxed whether you need the money or not. Inherited IRAs have to be liquidated within 5 years (at income tax rates). You can't claim losses on investments in IRAs/401ks...

It's 10 years.

Right - 401k is 10 years, IRA is 5 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:401k should not transfer tax liability to a new state. It is deferred compensation and should be taxed in the state where it was earned, like CA does for RSU awards.

401k is for the MC/UMC, not the rich.

I agree with this. There are significant disadvantages with 401ks/IRAs - Withdrawals are taxed at future income tax rates (which are not known). RMDs force you to withdraw and be taxed whether you need the money or not. Inherited IRAs have to be liquidated within 5 years (at income tax rates). You can't claim losses on investments in IRAs/401ks...

It's 10 years.

Right - 401k is 10 years, IRA is 5 years.

It's the year of death that determines 5 or 10 years
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary

[Anonymous]

Anonymous wrote:Seems a growing movement. So many people don’t have one and the people who do a huge tax giveaway to rich.

Look at all the New Yorkers retired to Florida who avoided SALT taxes for 40 years on 401k contributions now in Florida.

If we could tax those trillions would solve a lot of problems

This is the dumbest and most informed post I’ve seen in quite some time. Most people who work (earned income) can contribute to a 401K either through their employer or an individual 401K.

[Anonymous]

Anonymous wrote:Lots of people no longer have pensions. We were told for decades to scrape by and live frugally to put the money into a 401k bc it’s your only means to a pension. This isn’t gravy for people. Come on. It’s hard work to sacrifice and save.

+1

[Anonymous]

*uninformed

[Anonymous]

Anonymous wrote:Sure, let’s remove the only remaining method of saving money for an ever longer retirement. Great idea. I guess we should all do ritualistic suicide once we hit 70. As far as people moving states, that’s New York’s issue for electing corrupt politicians in Albany who only know tax and spend giveaway politics.

Or at 30 yo like in Logan’s Run

[Anonymous]

Anonymous wrote:Old people Genx and older 401k should be taxed based on their net worth not income

Clearly a socialist poster above. What happens when your net worth declines, do you get a refund? How do you value assets such as a business, art collection, homes, etc. It’s very subjective.

[Anonymous]

Anonymous wrote:Old people Genx and older 401k should be taxed based on their net worth not income

But they were already taxed on the money that is now net worth.

[Anonymous]

Anonymous wrote:This is seriously beyond stupid. Unless you're recommending UBI and a stronger pension system as a replacement, please get out.

Exactly, in terms of actual dollars and percentage of income, the rich contribute more towards taxes that go towards building and maintaining infrastructure (roads, essential services etc) and also for social security. I would argue that the poor and LMC actually benefit disproportionately from the rich, not just for day to day functioning but also to qualify for need based college financial aid, pell grants etc.

You want to take away the few incentives that UMC have to save for future? At that point just implement the UBI

[Anonymous]

Anonymous wrote:Seems a growing movement. So many people don’t have one and the people who do a huge tax giveaway to rich.

Look at all the New Yorkers retired to Florida who avoided SALT taxes for 40 years on 401k contributions now in Florida.

If we could tax those trillions would solve a lot of problems

Put simply: eff off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Old people Genx and older 401k should be taxed based on their net worth not income

Clearly a socialist poster above. What happens when your net worth declines, do you get a refund? How do you value assets such as a business, art collection, homes, etc. It’s very subjective.

It's mind-blowing how people like them survive in the real world.