I wouldn't mind buying a gift, but she never tells me what he wants. I think it's so she gets to buy the fun stuff for him with our money and it's like it comes from her.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34508945)

wtf is wrong with you

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509040)

401k's eliminate costly capital gains taxes and will give you a most likely lower tax rate. Even if the tax rate isn't lower, the capital gains savings are big enough that anyone should max it out if they have enough. Worst case if you need it then you pay a 10% penalty.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509060)

pwned

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509129)

Under the current rules, there are huge advantages to 401ks for people making above $100k or so a year (person not household)

It'll require pretty large rule changes that would have to overcome large, heated opposition to alter that.

And even if that happened, at worst you are probably put in same position as if you hadn't put it in 401k.

It is highly unlikely that putting it in 401k would end up costing you money, unless you are a prole that can't handle savings and need to take it out.

Are you a prole with no impulse control, brother?

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509182)

My hope is that the GOP efforts end up like the AHCA and Trump then starts making serious efforts to lead a bipartisan effort. The problem is that Trump hasn't even shown a willingness to back the Lamar Alexander/Murray bipartisan healthcare bill. He seems dead set on governing as a standard issue conservative.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34508717)

401Ks make you feel richer than you are. People tend to count it in their heads as 100% of account value but really they should count it as 100% less expected effective tax rate at withdrawal of its value. So really, in a bad future tax scenario, your 401K is actually worth 50% of account value.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34508895)

the biggest benefit to a 401(k) is an employer match. everyone should always contribute to obtain the full match.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34508910)

401K match gave companies cover to get rid of defined benefits though but then those are worthless if you can't stay 10 years+ so it's a wash.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34508919)

Lots of say 150K or less 2 kid families (most households) have pretty low current tax though so the benefit of a 401K is really overblown for them. They're taking on future tax policy risk.

It makes sense for all the xo pumos making 500K+ since their marginal rate is just so damn high, unless this country really goes to shit.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34508930)

401k is a pure tax arb

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509050)

When you take withdrawals from your 401(k) account, that money becomes regular taxable income to you. You report retirement plan payments on your taxes as income and not as investment gains or investment income. Withdrawing from your 401(k) in retirement produces the same type of taxable income as earning a salary or wages when you were working. Any and all money you take from your 401(k) account must be reported as income for the year of withdrawal. If you take money from your 401(k) before age 59 1/2, an extra 10 percent tax penalty will apply.

Are u sure? Sounds like all withdrawal is taxed as ordinary income.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509143)

But your 2nd scenario is where you’ve already been taxed and then invest the rest for a 10% gain. The gain will be taxed at long term cap gain rates.

That needs to be taken into account. You cant say that the value of your 401k is only 60-70% if its value, but then ignore that all your non 401k investments (other than $500k gains on your primary residence) will also be taxed upon withdrawal.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509220)

It's not a "fudge error", especially if you've been investing 40+ years.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509316)

Alternative isn't just brokerage accounts for average Americans. Lots of people may be better off in Roths. Even then, a retired couples would 75K+ in taxable income to start paying capital gains. You can selectively withdraw down to avoid it with brokerage accounts.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509356)

THERE ARE TWO DISTINCT ADVANTAGES:

TAX ARBITRAGE

AVOIDANCE OF CAPITAL GAINS.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509465)

There's hard to capture value in the long term flexibility of an ordinary brokerage account. And more things to have done with money besides that if you unlimit yourself to retirement accounts.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509556)

lol law bort.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509094)

Lol lawyers

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509192)

This is forcememed by everyone including media. Not many people understand your example.

But everyone forgets about no capital gains taxes.

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34509118)

if there is no 401K and only IRA people wouldnt save as much and some would put in nothing at all

also at the end of the day for 95% of people its a good deal since its very unlikely they will have a higher tax rate at 65 than their peak earning years

its one of the few things that our tax system does well. its much better than the mortgage interest deduction or state tax deduction for sure. I would get rid of those two first before even thinking of 401k

(http://www.autoadmit.com/thread.php?thread_id=3772213&forum_id=2#34510028)