Obama proposals include 401k, 403b, 457, and IRA changes
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- by Mike R, on Fri Nov 7, 2008 7:11am PST
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<p><strong>Obama proposals include <a rel="nofollow"
id="KonaLink3" style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-size:12px;">retirement</span></a>
plan changes</strong></p> <p>Referencing the
article By David Pitt, AP Business Writer </p> <p>We
have gotten fervent feedback to our recent articles about the
changes to your <a rel="nofollow" id="KonaLink16"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;background-color:transparent;">401k</span></a>
, 403b, 457, and IRA accounts that may change under the Barack
Obama Presidency. eRollover is striving to keep you up to date on
these possible changes. I am actually referencing an article by
David Pitt to delve a little bit further into possible 401k and
retirement changes. The original article can be found <a
rel="nofollow"
href="http://biz.yahoo.com/ap/081106/401k_insight.html?.v=1">here</a>.<br>
<strong><br> Retirement initiatives among economic
priorities in Obama administration </strong></p>
<p>The election is over and the message is clear — the
economy is priority one. The big question now is how some of
President-elect Barack Obama’s campaign proposals will affect
retirees and workers with 401(k) and other <a rel="nofollow"
id="KonaLink4" style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">retirement
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">accounts</span></a>
. Looking at them a bit closer may reveal some clues.</p>
<p>Q: What are some of the ideas Obama has proposed that
could impact my <a rel="nofollow" id="KonaLink5"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;background-color:transparent;">retirement
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;background-color:transparent;">planning</span></a>
?</p> <p>A: One issue Obama has endorsed may get
serious consideration before he takes the oath of office in
January.</p> <p>Obama proposed a temporary suspension
of the required minimum distribution rule, which forces tens of
millions of retirees to take money out of their IRA and 401(k)
accounts once they turn 70 1/2. The rule is designed to give the
government its share of the <a rel="nofollow" id="KonaLink7"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">taxes</span></a>
on the money, which has been accumulating <a rel="nofollow"
id="KonaLink8" style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;background-color:transparent;">tax
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;background-color:transparent;">free</span></a>
. Failure to take out the money results in a 50 percent penalty
assessed by the IRS.</p> <p><br> </p>
<p>Suspending the mandatory withdrawal would allow people to
keep the money in the account and possibly recover some of their
losses when the market recovers.</p> <p>Obama’s
plan would temporarily waive the penalties and taxes on withdrawals
made after age 70 1/2. There’s interest in Congress to get it
done — sooner rather than later.</p> <p>The
chairman of the House Committee on Education and Labor, Rep. George
Miller, D-Calif., has asked Treasury Secretary Henry Paulson to
suspend the <a rel="nofollow" id="KonaLink9"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">tax
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">penalty</span></a>
immediately.</p> <p>AARP, the Washington-based group
that represents 39 million people aged 50 and older, also has urged
Paulson to take the action right away.</p> <p>David
Certner, the group’s legislative policy director said the
required withdrawals essentially force retirees to take money out
of the market at the bottom, recording large losses, rather than
letting them keep their money in the account to potentially recoup
the losses when the market improves.</p> <p>Department
of Treasury spokesman Andrew DeSouza said Wednesday he had nothing
to report on the issue and declined to comment further.</p>
<p><br> </p> <p>“There’s
absolutely no reason to force people to take out a larger share of
their current account at the bottom of the market,” said
Monique Morrissey, an economist with the Washington-based Economic
Policy Institute. “It doesn’t make any sense at
all.”<br> A second proposal made by President-elect
Obama would allow workers to make hardship withdrawals of up to 15
percent of their balance from <a rel="nofollow" id="KonaLink10"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">individual
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">retirement
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">accounts</span></a>
or 401(k) plans this year and in 2009. A withdrawal of up to
$10,000 would not be subject to the 10 percent <a rel="nofollow"
id="KonaLink11" style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">early
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">withdrawal
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">penalty</span></a>
charged by the IRS, but normal <a rel="nofollow" id="KonaLink12"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">income
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">tax</span></a>
would be due.</p> <p>Some economists believe too many
401(k) plans already are underfunded and too frequently tapped for
<a rel="nofollow" id="KonaLink13"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;background-color:transparent;">loans</span></a>
or early withdrawals, and making such a change sends the wrong
message.</p> <p>“I know people are feeling pain,
but if you raid the piggy <a rel="nofollow" id="KonaLink14"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-weight:400;font-size:12px;">bank</span></a>
every time there’s market downturn or recession, you will not
have enough left in the piggy bank for old age,” Kra
said.</p> <p><strong>Please visit our site for
more Retirement, 401k, and <a rel="nofollow" id="KonaLink15"
style="text-decoration:underline;"
href="http://erollover.com/blog/obama-401k/obama-401k-403b-ira-change#"><span
style="color:#009600 important;font-family:Arial, Helvetica,
sans-serif;font-size:12px;background-color:transparent;">Insurance
</span><span style="color:#009600
important;font-family:Arial, Helvetica,
sans-serif;font-size:12px;background-color:transparent;">information</span></a>
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Related: retirement plan, retirement changes, retirement accounts, president elect, plan changes, oath of office, minimum distribution, ira accounts, economic priorities, campaign proposals, barack obama, 401k 403b
Posted by Fri Nov 7, 2008 11:02pm PST