You know what happens when you assume.
From what I see around many places, if they have houses, they are trying to pay the refinanced, equity taken out to live mortgages.
Average 401(k) balance for 65 and older is $272,588. median $88,488.
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From what I see around many places, if they have houses, they are trying to pay the refinanced, equity taken out to live mortgages.
Triple_Se7en
$50 Site Donor 2024
She might want lump sum. How hard is the 'hit'?
The Fisher Investments advertiser on the radio says it can go beyond 26%. So maybe then..... 30%?
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How does that work? I’d imagine the taxes and insurance alone would almost exceed the maximum social security benefit.
I am of the age where we taught and prodded each other to plan ahead and also encouraged our friends, and workplace peers to do the same. My company was offering a 50% match, and I exclaimed "free money!" let me maximize this and get all I can - even if living paycheck to paycheck at times.
Then add a slice of the market gain of 300% in the last 10 years of work prior to retirement - this was quite a gift. I must guard this golden egg now with vigilance and vigor. - Arco
Then add a slice of the market gain of 300% in the last 10 years of work prior to retirement - this was quite a gift. I must guard this golden egg now with vigilance and vigor. - Arco
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The taxes at both locations are extremely low. Insurance I believe they under insure.
My understanding is it would be taxed as ordinary income for Federal and State. Perhaps hit the 32% bracket for taxable income over $191K. If she makes other taxable income, she will likely hit that bracket or more. This is for single filers.
Talk to a tax advisor. Schwab allows me to talk to one for free.
It becomes taxable income for whomever takes it - just like if you take it out.
Taking a lump sum of $272,588 would become income for whomever. If that were there only income the last little bit would be taxed at 35% - just for federal, and that is under the current tax law which expires next year. We shall see if its renewed. Add state to that.
If you have $270K in a 401K that your likely not to spend, it would be good to get some tax advice. Might be best for you to start taking it out and investing it outside of the 401K, so it transfers with your estate - depending of course your personal tax rate.
The market gain is perhaps inflating worth, depending on the future. We will see. Regardless, it is a good place to be.
My example, married filing jointy. Middle/ upper middle class 40 year+ work history looking at ~ $6k./mo SS benefits combined claimed "early" at age 65 and 67.
prop tax: 6500- Home ins: 700- annually. Our state has no income or sales tax.
I guess the taxes on an oceanfront home in MA that he referenced must be much much cheaper than what I’m used to. Not to mention a ski house too. I figured $50k in taxes between the 2 and another $10k in insurance and thought I was low. Florida is a killer.
The super catchup will likely benefit me. I have some inherited 401(k) money; the rules are I must withdraw it all in 10 years, meaning pay taxes on it.
With the super catchup I can max out tax-deferred income to help offset this other money I have to take. It’ll only help a little, but every little bit helps.
I wish I had started way earlier at current employer who matches 7% of overall salary and places profit sharing in too. People who have been there have a ton of money in 401k.
You have to think about what all these special deals are for. Our benevolent leaders don't do it cause they like us.
The 401K was specifically intended to prop up wall street and the investment industry.
A "catch up" might be intended to keep the inflows into the market coming - since they need to keep the market propped up. A substantial amount of federal income tax is directly from equity appreciation, so keeping the market juiced may result in more taxes, even with people deferring taxes with a larger tax deferred catch up investment?
The 401K was specifically intended to prop up wall street and the investment industry.
A "catch up" might be intended to keep the inflows into the market coming - since they need to keep the market propped up. A substantial amount of federal income tax is directly from equity appreciation, so keeping the market juiced may result in more taxes, even with people deferring taxes with a larger tax deferred catch up investment?
I’ve met a few 401K millionaires at my job.
They don’t regret contributing to employer sponsored retirement plan.
Capital gains tax isn't as much as "I'm working here" tax, aside from the lowest brackets. Equities appreciate because companies hoarding cash give the shareholders better tax advantages than paying dividends.
401(k)s are just one of many ways the govt props up banks and Wall St. If you get disaster relief now it's a debit card, issued by a bank, with that bank providing customer service and not Uncle Sam. They love coercing people into opening numerous little bank accounts for dependent care, eyeglasses, college etc.
It does prop up wall street, but short term cap gains and dividends are taxed like normal income, and the ones making those types of trades are often in the highest brackets. A signficant source of federal income taxes is from those places
It makes sense for growth companies to "hoard cash" as you say and invest it in their business. Thats why people invest in them. If I wanted a income stream I would buy a utility or a bond, not a growth stock. I don't want them to give me my money back, I want them to expand it.
There is also the "wealth affect" function - my 401K/house/ whatever is valued to the moon so I no longer have to save - just spend and prop up the economy.
Wall street / banks / govco - 3 legged stool.
I know you weren't replying to me but think of those limits and they could be Roth contributions too. Like I said in a previous post, my plan is 415(c) limited. The plan design allows for standard 401k contributions to be Roth, and then after the limit, after tax contributions that sweep to a backdoor Roth.
Retired 13 years with a disability at 61 last job only lasted 40 years. Between union pension and ss and the wifes little pension and ss. Haven't touched our savings and still putting money away. Moved from St. Louis area to very rural. 60 acres of woods house sits 1/4mile back surrounded by cattle farms. Never bought play toys, big houses or expensive vacations. If you don't have very good health and scripts insurance your in for a rude awaking . Last few years investments made as much than if i was still working.
Because they are not dumb dumb TikTok bobble heads that I see under the age of 50 walking around like zombies glued to their cellphones.
Sequoiasoon said:
Don’t anyways count on that. The company I’ve worked for for 17 years, when I started, had a retirement accumulation program like this. About 4 years after I started, they decided this was “too expensive” and discontinued the program. For about 3-4 years, they left the accounts frozen but accumulating interest. Then they decided this too, would be too expensive, and forced us to close out those accounts.
Your reasoning here was exactly why I asked the questions I did… if all non-C-suite employees were to have unlimited yearly contributions, the potential to fuel stock prices would be even higher, which would benefit the C-suiters & billionaires alike.
Then on the backside, govt reaps the ongoing windfalls of Roth tax collections now, and normal 401k tax collections in the future. This plan would also allow the “sunset” of SS for those under say 50, and return more freedom and responsibility to people.
