Obama and Your 401k
President Obama’s administration has been very proactive in dealing with our economic crisis. One area is our 401k. While I do not necessarily agree with some of their actions - because I think touching your 401k or IRA money is the last place you should go to for cash - they are worth summarizing.
• Relaxed Hardship Withdrawal. This would mean that the 10% penalty for taking out money early from an IRA would be waived up for to 15% of your plan or $10,000.
• Minimum Age Distribution. Some IRAs require minimum distributions once you reach age 70 ½. This would be temporarily suspended.
• Automatic IRA. I love this one! Small businesses without 401ks would be required to enroll their employees in an automatic savings IRA.
• Pie In The Sky. This would be a government backed retirement savings account that would guarantee a return of inflation adjusted of 3%. There is a very slim chance this will happen but you never know…