Post: #1

In a month or so I am going to have the option of rolling over my 401k. There's a hefty amount of money in it given my age.

I'd like to either put it into a roth IRA or do a lump distribution into my brokerage account (fully aware of the tax implications).

However, i'm concerned about the likelihood of the government changing the Roth IRA tax rules for the future. Seeing as things can clearly change very quickly i'm almost 35ish years away from being able to touch that money if I put it into an IRA.

Could it be possible that we will see some sort of 10% withdrawal fee in the future or other odd requirements?

Post: #2

Sure, there's always a chance. You can't predict what the government will or will not do. All you can count on is higher taxes and less freedom.

Precautions you can take include multiple passports/citizenships (aside: my spell check did not recognize citizenships as a word hah, that has been remedied) and assets that are diversified across asset classes and jurisdictions. Only then are you truly free, or as free as possible anyway.

Post: #3

There's no way to predict what will happen with retirement accounts. A few thoughts you may find helpful:

• Obama has now tried twice to pass a 3 million cap on retirement accounts and both have failed, but this is an attempt already at going back on their word (government). Even if you don't like rich people, we should all be concerned about government attempts to do this as they're breaking promises and trying to manipuate us in the process.
• Many millennials in the US are fucking retarded and will probably pass a law that ends up hurting them relative to retirement accounts, so that increases the chances that the government breaks its word. Some Millennials on this forum will get defensive about this, but look no further than the healthcare law which these idiots supported that transferred money from the young to the old.
• The flip side to those two items are if the government goes back on its word too much, then the responsible will trust it less and less, which could exacerbate another crisis they don't foresee. They may go back on their word for a small percent so they can manipulate the large percent in their favor. In other words, they go back on their word for the top 10%, but not the bottom 90%.
• Reading between the lines here, you want to retire with some money, but not too much that the government sees or else you may end up in that unlucky few. Let's say you're 25 (sorry, don't know this) and you have $200K in a Roth. You might not want to contribute much more because it has 30 years to grow, if you have the option of taking it early at 55.
• Aim for $3-5 million in a Roth (inflation adjusted) by the time you retire, which will be close to the limit protected. With any 401k plan, if you're getting a match, get the match, if you're pacing well above your limit based on this point ($3-5 million), cash out and eat the taxes now.
• For retirement, consider some hard assets (your choice) over the next 35 years (plenty of time to pick your timing and learn about them) that you can also rely on. These should also be good even if there's a new government or financial system in place. Learn other "non-financial" ways to generate a return that the government can't tax; something as simple as learning how to cure a physical problem cannot be taxed, but creates wealth for you (and potentially opportunities).
  

Unfortunately, no predictions because it's very hard to know, but the above advice will more than likely work in a person's favor in either situation.

Post: #4

The amount of money held in Roth IRA / Roth 401(k) accounts is not significant enough to bear the legal and political challenges that would be associated with trying to raid those funds.

What is a much more likely target are defined benefit pension plans earning "excess returns" and IRA balances over $3mm-5mm. This is essentially in line with Democrats' general direction over the last several years.

If you're looking for secure tax advantages, mainly, then go for real estate. Tax benefits are huge and that's where most of the Democrats have their money...

Post: #5

(08-06-2015 12:30 PM)SunW Wrote:  There's no way to predict what will happen with retirement accounts. A few thoughts you may find helpful:

• Obama has now tried twice to pass a 3 million cap on retirement accounts and both have failed, but this is an attempt already at going back on their word (government). Even if you don't like rich people, we should all be concerned about government attempts to do this as they're breaking promises and trying to manipuate us in the process.
• Many millennials in the US are fucking retarded and will probably pass a law that ends up hurting them relative to retirement accounts, so that increases the chances that the government breaks its word. Some Millennials on this forum will get defensive about this, but look no further than the healthcare law which these idiots supported that transferred money from the young to the old.
• The flip side to those two items are if the government goes back on its word too much, then the responsible will trust it less and less, which could exacerbate another crisis they don't foresee. They may go back on their word for a small percent so they can manipulate the large percent in their favor. In other words, they go back on their word for the top 10%, but not the bottom 90%.
• Reading between the lines here, you want to retire with some money, but not too much that the government sees or else you may end up in that unlucky few. Let's say you're 25 (sorry, don't know this) and you have $200K in a Roth. You might not want to contribute much more because it has 30 years to grow, if you have the option of taking it early at 55.
• Aim for $3-5 million in a Roth (inflation adjusted) by the time you retire, which will be close to the limit protected. With any 401k plan, if you're getting a match, get the match, if you're pacing well above your limit based on this point ($3-5 million), cash out and eat the taxes now.
• For retirement, consider some hard assets (your choice) over the next 35 years (plenty of time to pick your timing and learn about them) that you can also rely on. These should also be good even if there's a new government or financial system in place. Learn other "non-financial" ways to generate a return that the government can't tax; something as simple as learning how to cure a physical problem cannot be taxed, but creates wealth for you (and potentially opportunities).
  

Unfortunately, no predictions because it's very hard to know, but the above advice will more than likely work in a person's favor in either situation.

I'm a millennial and age wise i'm 26 so all of this applies to me. I expect my generation to go full retard in the coming years. My kind are a very dumb bunch.

Thanks for the post.

Post: #6

Diversify.

The tax rules of traditional retirement accounts (401k, t-IRA) are the opposite of those of Roth accounts.

Put money in both on the front end, so you hedge on tax changes risk on the back end (retirement).

Let's say they raise taxes between now and 30 years. You paid into your 401k tax free, but you pay higher taxes on the money you withdraw. At the same time, you had already paid lower taxes on the money you contributed to your Roth and you can withdraw from the Roth tax-free. You can, however, lower your tax liability on the 401k withdrawals by staying in the lower tax brackets.

Post: #7

(08-06-2015 10:35 AM)The Beast1 Wrote:  In a month or so I am going to have the option of rolling over my 401k. There's a hefty amount of money in it given my age.

I'd like to either put it into a roth IRA or do a lump distribution into my brokerage account (fully aware of the tax implications).

However, i'm concerned about the likelihood of the government changing the Roth IRA tax rules for the future. Seeing as things can clearly change very quickly i'm almost 35ish years away from being able to touch that money if I put it into an IRA.

Could it be possible that we will see some sort of 10% withdrawal fee in the future or other odd requirements?

You do understand the tax implications of rolling the 401k into a Roth IRA v. a traditional IRA?

Why do you want to move it? Shitty investment choices?

Does your 401k allow you to take loans?

Post: #8

I was of the understanding that the principal of a roth ira can be withdrawn at any time with no penalty.

Post: #9

Yes I know all of the implications. I'm concerned some politician will try and change the tax rules later on. Yes even though they're supposed to not tax it my gut says fat chance. Especially 30 years down the road.

I'm changing because of a job change. New job, new 401k.

Post: #10

You can keep the money in the old 401k and roll over to an independent IRA whenever, as far as I'm aware.

The more involved strategy would be to figure out your maximum annual tax deduction, and do a Roth ladder -each year, only roll over as much as you can without falling into a higher tax bracket.

Post: #11

I fully expect the government to start looting retirement accounts when push comes to shove and they have to decide between cutting entitlements or raising taxes.