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From: mclean@bnrmtv.UUCP (Rick McLean)
Newsgroups: net.taxes,net.invest
Subject: Re: New penalty on 401k plan withdrawals
Message-ID: <682@bnrmtv.UUCP>
Date: Wed, 3-Sep-86 13:31:24 EDT
Article-I.D.: bnrmtv.682
Posted: Wed Sep  3 13:31:24 1986
Date-Received: Thu, 4-Sep-86 21:36:15 EDT
References: <2fc05008.2a75@apollo.uucp > <3095@teddy.UUCP>
Organization: Bell Northern Research, Mtn. View, CA
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Xref: mnetor net.taxes:563 net.invest:1174

> 
>  > >From: tbg@apollo.uucp (Tom Gross)
>  >
>  >                                                         ...   It may
>  >    not be that 28%+15% will equal out to what your original tax would
>  >    had been on your 401k contribution, if 401ks had never existed,
>  >    but how much complexity do you want?
>  >    ...
>  >    I might have cashed in mine (it was one of the first things I 
>  >    thought of when they were talking about lowering the top rate to 
>  >    27%), but it doesn't bother me that they out-flanked me on this 
>  >    one....
>  >
>  >    Tom Gross
>  >    Apollo Computer, Inc.
>  >    Chelmsford, MA
> 
>                                           ...   I feel that the gov't is
>  renigging on old promises (why doesn't this surprise me :-) ).
> 
>  The 401k was advertised as a means of reducing your taxable income WITH 
>  the extra eye-catcher that you would be able to remove the $$ from the 
>  401k for financial difficulties (eg. Buying a house, college expenses, ...).
> 
>  For those of you who invested your money for any of these reasons, you
>  are now taking it in the rear from old Uncle Sammy.
> 
>  Further, according to the nightly news a couple of days ago, the polls are
>  saying that the public does not agree with what the gov't is doing regard
>  ing this "simplification" of our tax system....
>
I have been using the 401K to save for a house and now am faced with the
change.  What I missed in these articles is that the change also denys
access to company contributions.  This effectively means the down payment
will evaporate at the end of the year.  I agree that this was a bait-and-
switch to alleviate the lack of Social Security funds "when the baby-boomers
retire".