President Obama has broken the following promise:
"Obama and Biden are calling for legislation that would allow withdrawals of 15% up to $10,000 from retirement accounts without penalty (although subject to the normal taxes). This would apply to withdrawals in 2008 (including retroactively) and 2009." — Change.gov Agenda - The Economy
Sources: http://change.gov/agenda/economy_agenda/
Other promises regarding our economy.
UPDATES:
Updated: February 19, 2009
Penalty-free hardship withdrawals nowhere to be found
Obama proposed penalty-free withdrawals as part of an overall plan to address the economy. It was noted a few weeks ago (see previous update below) that penalty-free 401(k) withdrawals were not in the proposed economic stimulus bill, formally known as The American Recovery and Reinvestment Act of 2009. The measure didn't make it into the final version, either, which the president signed on Feb. 17, 2009.
After searching congressional databases we still can't find any legislation that's been introduced to make 401(k) withdrawals penalty-free. Congressional staffers have indicated there are no plans in the works for it to get any serious consideration any time soon.
Sources:
Library of Congress, The American Recovery and Reinvestment Act of 2009, Feb. 17, 2009
Updated: January 28, 2009
Penalty-free 401k withdrawals not in stimulus
Obama proposed penalty-free withdrawals as part of an overall plan to address the economy. As of this writing, the measure is not in the stimulus bill, nor in any other legislation that we could find.
The rules for hardship withdrawals from 401(k) plans are complicated and can vary depending on your employer's policies and how close you are to retirement. But in general, you can withdraw money early if you have no other source of money and can document a specific hardship — medical bills, impending foreclosure, college expenses and other things. (See detailed guidelines from the IRS on hardship withdrawals .) The penalties are steep: The government taxes the money as regular income, and there's an additional 10 percent penalty in addition to that.
Besides that, the money won't earn compounded growth to build wealth, and during these economic times, early withdrawals lock in market losses that might turn around in time.
Obama proposed eliminating the penalty (but not the regular taxes) on hardship withdrawals, and making it retroactive to 2008. If passed, that could help people who will have to pay taxes on money they've already taken. But as we said, the measure is not in the stimulus bill.
Sources:
Interview with Ed Ferrigno of the Profit Sharing/401K Council of America
Interview with Bob Williams of the Tax Policy Center
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Hi,
I was hopeful that once elected President Obama would add to the stimulus package his promise to have an elimination of penalties on withdrawals from retirement plans, including IRAs. Under one plan, 15 percent of the balance up to $10,000 would qualify for penalty-free withdrawals. You would still owe federal and state income tax on the amount withdrawn, but you would avoid the 10 percent early withdrawal penalty.
Where can we shout out that we need some relief! I want to tell the President how much I need my 401k money! I just got laid off and I have two kids in college, I am 51 years old in a depressed job market. Things are going from bad to worse and I need some relief! I see everyone else getting relief all around me. It seems like every day I listen to the news and there is another Billion going out to help big organizations and governments but not the regular Joe's like me or Joe the plumber! All I am asking for is the ability to use my 401k money without a penalty! It's my own money and I am not asking for a bailout - I want to use my money to keep me out of the poor house!
eks ago (see previous update below) that penalty-free 401(k) withdrawals were not in the proposed economic stimulus bill, formally known as The American Recovery and Reinvestment Act of 2009. The measure didn't make it into the final version, either, which the president signed on Feb. 17, 2009.
After searching congressional databases we still can't find any legislation that's been introduced to make 401(k) withdrawals penalty-free. C
This concept appeals to the dangerous tendency of mainstream capital markets to subtract everything to the point that it is no longer anchored in real value.
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Agreed with your points and nevertheless he is still a complain. May be he would have though that particular changes would be in better favor.
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This is one way to show how people are suffering in the current leadership. Hope things go well for you and who are in the similar situation
My husband is terminally ill. To make ends meet I apparently have to be terminally ill myself or lose my home for which I am presently working 3 jobs (to keep a roof over my childrens' head during this crisis) to prevent our being foreclosed upon. Unfortunately, and this is being said sarcastically, I am being punished for having insurance to meet our medical bills. I am also being punished for not taking advantage of government programs for which others use so freely. Tell me where the justice is in all of this? I guess I'm like George Baily in It's a Wonderful Life when he's told that he's worth "more dead than alive." Thank God for a system which seems to care so much for a hard working citizen.
sed penalty-free withdrawals as part of an overall plan to address the economy. It was noted a few weeks ago (see previous update below) that penalty-free 401(k) withdrawals were not in the proposed economic stimulus bill, formally known as The American Recovery and Reinvestment Act of 2009. The measure didn't make it into the final version, either, which the president signed on Feb. 17, 2009.
After searching congressional databases we still can't find any legislation that's been introduced to make 40
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hopeful that once elected President Obama would add to the stimulus package his promise to have an elimination of penalties on withdrawals from retirement plans, including IRAs. Under one plan, 15 percent of the balance up to $10,000 would qualify for penalty-free withdrawals. You would still owe federal and state income tax on the amount
rce of money and can document a specific hardship — medical bills, impending foreclosure, college expenses and other things. (See detailed guidelines from the IRS on hardship withdrawals .) The penalties are steep: The government taxes the money as regular income, and there's an additional 10 percent penalty in addition to that.
Besides that, the money won't earn compounded growth to build wealth, and during these economic times, early withdrawals lock in market losses that might turn around in time.
Obama proposed eliminating the penalty (but not the regular taxes) on hardship withdrawals, and making it retroactive to 2008. If passed, that could help people who will have to pay taxes on money they've already taken. But as we said, the
es and how close you are to retirement. But in general, you can withdraw money early if you have no other source of money and can document a specific hardship — medical bills, impending foreclosure, college expenses and other things. (See detailed guidelines from the IRS on hardship withdrawals .) The penalties are steep: The government taxes the money as regular income, and there's an additional 10 percent penalty in addition to that.
Besides that, the money won't earn compounded growth to build wealth, and during these economic times, early withdrawals lock in
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