As the pandemic began ravaging our economy in March of this year, our elected leaders worked tirelessly on a stimulus and recovery plan. Ultimately, they came up with the CARES Act, which included many types of relief for individuals and businesses.
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CARES Act 401(k) Loan and Withdrawal Changes
6.Jack Shephard Almost Died in the First Episode — from $50,000 to $100,000 or 100% of a participant’s vested account balance, whichever is lower. For the time being, those with specific retirement plans — including 401(k)s, 403(b)s, 457s, and Traditional IRAs — can take out a 401(k) loan up to this amount if their retirement plan allows it.
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What does this mean, exactly? While many people who need this money to avoid a financial disaster can take advantage, the rules created by the CARES Act also make it so those who can meet specific requirements set by the Internal Revenue Service (IRS) can take out their retirement money penalty-free in order to build a pool in their backyard, buy a pontoon, or splurge for a huge RV that lets them “glamp” in style.
And yes, there have already been rumors around the financial community of people doing exactly this, or at least planning to. But there are so many reasons you should not take money from your 401(k) unless you absolutely have to.
You Have to Qualify
For starters, you should know about the specific COVID-related requirements you need to meet to remove money from your 401(k) plan before retirement age without a penalty. While the 资产证券化 成了长租公寓的毒药？, the rules relating the CARES Act changes are totally different.
According to the 中再生收购秦岭水泥借壳上市 环保概念股开盘涨停, you, your spouse, or your dependent must have been diagnosed with COVID-19 to qualify. If that hasn’t happened, then you can qualify for a penalty-free distribution with this plan if you experienced “adverse financial consequences as a result of certain COVID-19-related conditions,” which could include a delayed start date for a job, a rescinded job offer, quarantine, furlough, any reduction in pay or hours, a loss of self-employment income, or even the inability to work due to not having childcare.
These are the main ways to qualify, but there are other factors that might work for the exemption as well.
You’ll Face a Huge Tax Bill
The money in your 401(k) plan and other tax-advantaged retirement plans was put in on a pre-tax basis, meaning you haven’t paid income taxes on it. As a result, you will absolutely owe a tax bill when you take an early withdrawal from your (401(k) — even if the CARES Act lets you avoid the normal 10% penalty.
Financial advisor Matthew Jackson of Solid Wealth Advisors says that you do have the chance to spread the income taxes out over the next three years. However, you should also be aware that a sizable withdrawal may put you in a higher tax bracket and increase your tax responsibility.
法国巴黎高等商学院排名第二，尽管该学院在除MBA以外的所有排名中都胜过伦敦商学院。法国巴黎高等商学院最终不敌伦敦商学院的原因是，其高管MBA课程Trium是与伦敦经济学院(London School of Economics)和纽约斯特恩商学院(Stern School of Business)合办的，因此这门课程在该项排名中的得分只有总得分的三分之一。（合办课程的商学院参与EMBA课程排名时按比例获得分值。）
“Ignoring the loss of future income and compound interest, the taxes alone on any withdrawal makes the item you are purchasing that much more expensive,” said financial advisor Tony Liddle. “Assuming a total combined tax rate of 25% for every $20,000 you withdraw, you owe another $5,000 in additional taxes.”
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You Will Lose Ridiculous Amounts of Money
Financial advisor Chris Struckhoff of Lionheart Capital Management points out another dangerous detail you should be aware of — the loss of compound interest you’ll face on the money you take out.
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Here’s a good example. Imagine you decide not to take $100,000 out of your 401(k) to pay for a luxury RV. Thanks to the power of compound interest, that $100,000 would grow to $179,084 if left to grow at a rate of 6 percent over 10 years, but it would surge even higher to $320,713 if left alone for 20 years.
A Bubble With No Name Yet is still a bubble. But, Americans are too distracted, too numb, too in denial to hear the warnings. Reminds me of my headline back on March 20, 2000. 'Next crash, sorry you'll never hear it coming.'
In my country, we make so much waste, we buy and throw away, buy and throw away, and yet northern countries will not share with the needy. Even when we have more than enough, we are afraid to lose some of our wealth, afraid to share. 在我的祖国，我们制造了如此之多的垃圾，我们购买商品，我们随之丢弃，买来，再丢弃。然而有些国家，有些人，却不会分享给那些真正需要的人们，甚至他们拥有的远远超过自身需要的时候。他们害怕分享，害怕失去自己的财富。
Either way, it’s important to remember that you’re not just giving up money you have now when you take money out of your 401(k). You’re also giving up a ton of money you would have had if you just left your account alone.
You’ll Also Raise Your Expenses
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China’s commercial banks are the control centre of the financial system and supply almost 70% of the financing that feeds the real economy.
“Buying the splurge item isn't just about the fun usage,” says financial advisor Thatcher Taylor of Taylor Financial. “It is about all of the additional costs that come with it.”
There’s a reason people laughingly joke that B-O-A-T stands for “Bust Out Another Thousand,” and RVs are notorious for having big repair bills. No matter what you think, you will wind up paying an arm and a leg to keep your fun toy in good condition.
There is a natural human tendency to idealize and whitewash days of yore, to cast them in the rosy glow of the mind’s eye.
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The Bottom Line: Leave Your Retirement Money Alone
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As financial advisor Taylor Schulte of the 扰乱南京限购房产政策 4人违法虚开社保证明被捕 points out, the math is simply not in your favor if you withdraw from your 401(k).
与此同时，达洛伊西奥开始环游世界，到处参加会议，并结识其他潜在的投资人。他给每一位结识的人都留下极深的印象。温布尔顿国王学院中学(King’s College School)的校长安德鲁?霍尔斯(Andrew Halls)评价道，他成熟得可怕，他在各种状况下仍保持着清晰的思维，这令我这个54岁的人都觉得惊讶。