UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: vargaj Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75615  
Subject: NEW 401k OPTION!!!!!!!! Date: 9/26/1998 8:34 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
In a WSJ article 9/25/98: Another option never before discussed on these boards (to my knowledge) is now possible. Evidently under IRS Code Section 402(e)(4) it is possible to take a distrbution of the entire amount and roll it into taxable account and take the taxable basis of the account. The owner of the account pays taxes on the basis (may be eligible for 5 or 10 year averaging for these taxes) The account grows like an ordinary taxable account and when securities are sold, long term capital gains taxes apply.

My point is that this relatively unknown option provides another stategy for retirement planning. I invite TMFPixy and KAT in chicagoland and all the regulars to evaluate this option. See WSJ 9/25/98 page C1.

On first blush this option has considerable advantages where the 401k has substantial capital gains, which if rolled into an IRA will be taxed as regular earnings, but would be taxed at lower rates if 402(e)(4) is taken advantage of, if I understand this right.

Comments all!!!

Joe Varga
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Value Hounds

Ubiquiti Analysis
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement