July 8, 200818 yr I guess I can see what you are cold-bloodedly saying, but reality isn't as simple as you're trying to make it. If you've been an auto worker making, say $30 an hour, for instance, and you've got a home, two kids in college and you suddenly lose your job, and are unable to find one within, let's say a year...is it reasonable to expect that you have saved enough money to continue supporting yourself indefinitely? Most of the auto workers are actually lucky ones. They're being offered buyouts, at least. It's not at all unusual, especially in lower paying industries, especially non-union ones, where people are laid off without any severence. There was a report the other day on the rising number of hardship withdrawals from 401k's. Let me see if I can find it.....to me, that's a last resort. If the number of people who are resorting to the last resort is rising, this is a very disturbing indicator, IMO. They absolutely should be able to. First off the kids in college should be supporting themselves through student loans. As far as the 401k hardship withdrawals go, I worked for Fidelity processing those types of transactions for nearly 3 years, and there are always other options as opposed to those withdrawals. The majority of those are taken out to prevent a foreclosure on a home or an eviction from an apartment. It all comes back to overspending your (not you personally) means. People should not be buying more house than they can afford, or signing leases that aren't easily payable. The majority of these withdrawals aren't because of job loss, but more because of just not being able to afford the mortgage rates.
July 8, 200818 yr I guess I can see what you are cold-bloodedly saying, but reality isn't as simple as you're trying to make it. If you've been an auto worker making, say $30 an hour, for instance, and you've got a home, two kids in college and you suddenly lose your job, and are unable to find one within, let's say a year...is it reasonable to expect that you have saved enough money to continue supporting yourself indefinitely? Most of the auto workers are actually lucky ones. They're being offered buyouts, at least. It's not at all unusual, especially in lower paying industries, especially non-union ones, where people are laid off without any severence. There was a report the other day on the rising number of hardship withdrawals from 401k's. Let me see if I can find it.....to me, that's a last resort. If the number of people who are resorting to the last resort is rising, this is a very disturbing indicator, IMO. 30 dollars an hour, 40 hours a week, let's say 40 weeks a year. That's $48,000 a year. Are the kids going to Vanderbilt or to a school where they can pay in-state tuition? Does the family rely on a church (as well as unemployment benefits)? Do they smoke cigarettes regularly? How often do they go out to eat? And I am not talking about just after the job is lost- I believe in preparing for the worst scenario at all times. From my experience, I just notice that people waste money. From the combination of A) seeing how people misuse their money B) the effect of taxes on the economy and on me and C) the amount of money that is contributed to the poor by Churches, individuals, etc., I just don't support higher welfare programs as a solution to these problems.
July 8, 200818 yr They absolutely should be able to. First off the kids in college should be supporting themselves through student loans. As far as the 401k hardship withdrawals go, I worked for Fidelity processing those types of transactions for nearly 3 years, and there are always other options as opposed to those withdrawals. The majority of those are taken out to prevent a foreclosure on a home or an eviction from an apartment. It all comes back to overspending your (not you personally) means. People should not be buying more house than they can afford, or signing leases that aren't easily payable. The majority of these withdrawals aren't because of job loss, but more because of just not being able to afford the mortgage rates. Let me ask these questions of you: You advocate a parent not helping their kids with college if they're able? Yes, if you lost your job, you'd definitely have to rethink that strategy, but IMO, a parent should try to help their child avoid being saddled with debt if possible. There will always be debt, but to say that that's what students should be doing is pretty harsh, IMO. Next, a person who loses their job is probably not expecting it. Well, most of them. Auto workers, again, are unique to most of the workers in other industries where losses are occurring. Therefore, they most likely are not going to have "prepared" for it. I would suspect most people can afford their mortgage and bills while they're working. Then, it's not easy these days to just go and get a comparable job. I don't think that most people understand that. And lastly, do you still work for Fidelity or a comparable institution? The report I saw had nothing to do with withdrawals for those reasons alone. Generally, not much sympathy on BGP for people who are losing their jobs. :creepy: I sure hope none of us lose ours. Things are not getting any easier any time soon, IMO.
July 8, 200818 yr Let me ask these questions of you: You advocate a parent not helping their kids with college if they're able? Yes, if you lost your job, you'd definitely have to rethink that strategy, but IMO, a parent should try to help their child avoid being saddled with debt if possible. There will always be debt, but to say that that's what students should be doing is pretty harsh, IMO. FWIW, I support parents supporting their kids through college if possible
July 8, 200818 yr 30 dollars an hour, 40 hours a week, let's say 40 weeks a year. That's $48,000 a year. Are the kids going to Vanderbilt or to a school where they can pay in-state tuition? Does the family rely on a church (as well as unemployment benefits)? Do they smoke cigarettes regularly? How often do they go out to eat? And I am not talking about just after the job is lost- I believe in preparing for the worst scenario at all times. From my experience, I just notice that people waste money. From the combination of A) seeing how people misuse their money B) the effect of taxes on the economy and on me and C) the amount of money that is contributed to the poor by Churches, individuals, etc., I just don't support higher welfare programs as a solution to these problems. I would expect then, that you advocate shopping in thrift stores, no cable, internet or movie rentals, etc.... Payless tennis shoes, not Jordans. I want your job, where I can be worried about what the effects of higher taxes on the top 3% is a worry for me. :lol: From where I'm sitting, and pretty much everyone I know is sitting, that will have no effect on me that's worse than the effects of the current tax "breaks" that are being applied.
July 8, 200818 yr Let me ask these questions of you: You advocate a parent not helping their kids with college if they're able? Yes, if you lost your job, you'd definitely have to rethink that strategy, but IMO, a parent should try to help their child avoid being saddled with debt if possible. There will always be debt, but to say that that's what students should be doing is pretty harsh, IMO. Next, a person who loses their job is probably not expecting it. Well, most of them. Auto workers, again, are unique to most of the workers in other industries where losses are occurring. Therefore, they most likely are not going to have "prepared" for it. I would suspect most people can afford their mortgage and bills while they're working. Then, it's not easy these days to just go and get a comparable job. I don't think that most people understand that. And lastly, do you still work for Fidelity or a comparable institution? The report I saw had nothing to do with withdrawals for those reasons alone. Generally, not much sympathy on BGP for people who are losing their jobs. :creepy: I sure hope none of us lose ours. Things are not getting any easier any time soon, IMO. I don't feel parents should pay for college tuition. Just a personal opinion. I agree that most people while employed are not "preparing" for what could happen if they lose their jobs, but that's not a smart thing. You should always be prepared to have at the very least a couple months worth of money saved up and set aside in case of some sort of hardship situation IMO. I do not still work at Fidelity. There are a couple different reasons for the hardship withdrawals. They are: 1) to prevent a foreclosure or eviction from a primary residence 2) to cover medical expenses not covered by insurance 3) to purchase a primary residence 4) to repair property damage caused by a natural disaster or unnatural occurrance. I believe there is one other one, but I can't remember it right now. As to your point about people being able to afford their mortgages while they are still working their jobs, it's just simply not true. The majority of 401k plans, I'd say around 90-95% only allow hardship withdrawals while the employee is currently working for the company. If they are no longer employed the full amount of their account is available to them, subject to huge tax penalties of course.
July 8, 200818 yr I would expect then, that you advocate shopping in thrift stores, no cable, internet or movie rentals, etc.... Payless tennis shoes, not Jordans. I want your job, where I can be worried about what the effects of higher taxes on the top 3% is a worry for me. :lol: From where I'm sitting, and pretty much everyone I know is sitting, that will have no effect on me that's worse than the effects of the current tax "breaks" that are being applied. From a very young, age I was tight with money- from about 5th grade on, I never spent more than $40 on a pair of shoes (until I was forced to by Coach L :lol:). You know that I don't have a job paying that well, but I know the effects of taxes on the economy. I don't feel support many of them.
July 8, 200818 yr I don't feel parents should pay for college tuition. Just a personal opinion. I agree that most people while employed are not "preparing" for what could happen if they lose their jobs, but that's not a smart thing. You should always be prepared to have at the very least a couple months worth of money saved up and set aside in case of some sort of hardship situation IMO.[/b] A couple of months is much different than indefinitely. People are finding it very difficult to find a job in a couple of months these days. It really is not as easy as I think some think it is. I do not still work at Fidelity. There are a couple different reasons for the hardship withdrawals. They are: 1) to prevent a foreclosure or eviction from a primary residence 2) to cover medical expenses not covered by insurance 3) to purchase a primary residence 4) to repair property damage caused by a natural disaster or unnatural occurrance. I believe there is one other one, but I can't remember it right now. And after losing one's job, wouldn't those be legitimate withdrawal reasons? As to your point about people being able to afford their mortgages while they are still working their jobs, it's just simply not true. The majority of 401k plans, I'd say around 90-95% only allow hardship withdrawals while the employee is currently working for the company. If they are no longer employed the full amount of their account is available to them, subject to huge tax penalties of course. Agreed, but when faced with losing one's home, or trying to make it a few more months, do you advocate just losing the home?
July 8, 200818 yr From a very young, age I was tight with money- from about 5th grade on, I never spent more than $40 on a pair of shoes (until I was forced to by Coach L :lol:). You know that I don't have a job paying that well, but I know the effects of taxes on the economy. I don't feel support many of them. I've never spent more than $20 on a pair of shoes. At my age, though, the Naturalizers sure are looking like a good investment. :lol:
July 8, 200818 yr And after losing one's job, wouldn't those be legitimate withdrawal reasons? Legitimate reasons to need some extra money? Sure, but the hardship isn't available when you've lost a job. In instances where hardship withdrawals exist, loans are readily available and are much more practical, and have a much more minimal negative impact on their retirement accounts, while still giving them the money necessary. Agreed, but when faced with losing one's home, or trying to make it a few more months, do you advocate just losing the home? Are you talking about when they are still employed and facing the loss of the home or once they are no longer with their company?
July 8, 200818 yr Legitimate reasons to need some extra money? Sure, but the hardship isn't available when you've lost a job. In instances where hardship withdrawals exist, loans are readily available and are much more practical, and have a much more minimal negative impact on their retirement accounts, while still giving them the money necessary. Are you talking about when they are still employeed and facing the loss of the home or once they are no longer with their company? I misread the article. I found it. I also found the 6 reasons you spoke of. Here are the 6 reasons: 6 IRS-approved hardships:• Expenses for medical care previously incurred by the employee, the employee's spouse, or any dependents of the employee or necessary for these persons to obtain medical care. • Costs directly related to the purchase of a principal residence for the employee (excluding mortgage payments). • Payment of tuition, related educational fees, and room and board expenses, for the next 12 months of post-secondary education for the employee, or the employee's spouse, children or dependents. • Payment necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage on that residence. • Funeral expenses. • Certain expenses relating to the repair of damage to the employee's principal residence.
July 8, 200818 yr I misread the article. I found it. I also found the 6 reasons you spoke of. Here are the 6 reasons: 6 IRS-approved hardships:• Expenses for medical care previously incurred by the employee, the employee's spouse, or any dependents of the employee or necessary for these persons to obtain medical care. • Costs directly related to the purchase of a principal residence for the employee (excluding mortgage payments). • Payment of tuition, related educational fees, and room and board expenses, for the next 12 months of post-secondary education for the employee, or the employee's spouse, children or dependents. • Payment necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage on that residence. • Funeral expenses. • Certain expenses relating to the repair of damage to the employee's principal residence. The hours of sitting in a classroom reading over these things is coming back to me...Make it stop! :lol:
July 8, 200818 yr The hours of sitting in a classroom reading over these things is coming back to me...Make it stop! :lol: Ahhh!!! Now I have the key to your torture!:fire:
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