Just cashed out my 401k going into my 3rd month of unemployment
I am mid 40s, coming off a 100K+ job and nobody wants me. They are afraid I'll bail the second I find another 100k and those who can afford to pay 100k do not want to and will take a H1B instead.
Retirement is not in the cards right now. The 401k has proven to be a massive scam. But it'll take another 20 years before it gets fixed since that is when Gen Xers will be retiring into abject poverty
March 17th, 2017 12:36pm
Yep, this is basically where I'm at now, except I'm on 10 months.
March 17th, 2017 12:47pm
You are mid 40s and had less than 3 month savings?!!
When did you get into IT? Because if you have 20+ years experience you should have no issue finding a 100k job.
March 17th, 2017 12:47pm
Sucks. Passing interviews requires preparation, but what if you aren't invited at all, in spite sending dozens of CVs?
And another advice: do not take online tests and do not do 'homeworks'. A potential employer should spend equal time as you while you're evaluating each other. The lowest of the scum who give these automated tests are cheating by not spending a second of their time. This allows them to turn around 10,000s of candidates and you're irrelevant there. Do not feed these motherfuckers.
March 17th, 2017 12:52pm
Homeworks are even worse since they take longer. And all they do is skimp 10 seconds trough it, probably using an automated keyword finder.
March 17th, 2017 12:54pm
Gosh "Morons", it's almost as if people and experiences exist outside of your little bubble world. Wild!
March 17th, 2017 2:27pm
Being 45, after 20+ years in CS\IT you should have a good amount of savings. Barring some major life event that wiped you out. (ie Health issues, Divorce rape ect)
I know you had some health issues, yet you still had 10+ month in savings (at least it sounds like it)..
March 17th, 2017 2:42pm
I feel for you OP since you've just taking a giant tax hit on your 401k. Will you be paying 35% on all of it?
401ks can suck for this reason. For most people there's a time when you need your savings. Having it in a 401k means you'll be heavily penalized.
Well at least you did it in a new year. Stay unemployed through the year and maybe there is little tax hit?
BTW, how come you had so little in the 401k and no other savings?
March 17th, 2017 2:52pm
Don't you take a lower tax hit if you're not making any income? That's how it works up here in Canada.
Kenny the Robot
March 17th, 2017 2:56pm
>>Don't you take a lower tax hit if you're not making any income? That's how it works up here in Canada.
>>401ks can suck for this reason. For most people there's a time when you need your savings. Having it in a 401k means you'll be heavily penalized.
This is idiocy, because you never payed the taxed to begin with, they are just taking back the tax break they gave you for contributing in the first place.
March 17th, 2017 3:18pm
It's basically deferred income, eh? Like, if you make 100K one year then 50K next year, you can defer 25K so that you pay taxes on 75K twice rather than 100K once and 50K once.
Kenny the Robot
March 17th, 2017 3:25pm
"Don't you take a lower tax hit if you're not making any income?"
You're not "not making any income". You're taxed as if the entire 401k and all the gains are 100% earned income, NOT investment income.
These will usually be long term investment gains.
Consider you pay 30% overall. So you pay the 30% then invest the rest. The rest then gains by 50x over your career. When you pull it out you pay 0% capital gains because you have no income as a retiree.
Consider instead you stupidly decide to get a 401k. You pay 0% on the preinvestment income, but then pay full taxes on the money you take out. Now that might be lower when retired than when working, but often that's not the case. Even if it is, it is never less than if you simply paid regular income tax, invested, and withdrew decades later while paying 0% capital gains.
401k is for stupid suckers.
March 17th, 2017 3:25pm
"It's basically deferred income, eh?"
Correct, deferred INCOME and not capital gains.
Invest $10,000 in 401k. 40 years later it is worth $150,000. So you pay $52,500 when you withdraw. Total paid $52,500.
Alternately, take your $10,000 as income and pay 20%, $2000 in taxes. 40 years later it is worth $120,000. Your earned income is $0 that year. You pay $0 in capital gains. Total paid $2000.
March 17th, 2017 3:29pm
You are a fucking Idiot, here's why:
1) You are not investing the same amount of money, if you are contributing to you 401k pre-tax, so you are contributing 30-40% more money that will compound over your lifetime.
2) You company also gives you free money, often 6% of your annual income, ALSO TAX FREE, and that ALSO compounds over your life time.
March 17th, 2017 3:31pm
>>Your earned income is $0 that year. You pay $0 in capital gains
Capital gains tax has nothing to do with earned income. Where are you getting your tax advice from?
March 17th, 2017 3:35pm
401K is a section of law, right?
Laws change, right?
401K might just be for suckers!
Fullest of the Full
March 17th, 2017 4:41pm
March 17th, 2017 4:53pm
Morons if you ran the numbers you would understand why you are a retard.
March 17th, 2017 5:53pm
>>Short-term capital gains are taxed at the investor's ordinary income tax rate and are defined as investments held for a year or less before being sold. Long-term capital gains, on dispositions of assets held for more than one year, are taxed at a lower rate.
>>you are interesting it wrong.
Long term gains are taxed are a flat 15%
Short term are taxed are taxed as income. Not at your rate.
So yes, if you are pulling 150 our per year, that will be taxed as if you earned 150 that year, but we have a bracketed tax system.... So the money you didnt put away is taxed at the highest tackle bracked Every year. when you pull it out its your only income so it's taxed much lower.
You are running your numbers wrong. You seem to think that there is a case where someone earns 30k a year, then at retirement is suddenly pulling out 150k a year. that is simply not realistic
March 17th, 2017 6:24pm
sorry for the typos.. on mobile now
March 17th, 2017 6:25pm
> Long term gains are taxed are a flat 15%
They're actually taxed at 0% if you have less than $37k of earned income (which is separate from capital gains income).
It's pretty unbelievable.
March 17th, 2017 6:51pm
If you are running out of non-retirement savings after 3 months, you're doing it wrong.
In my last few job searches, it took 6-12 months to find a job. This time I got lucky and got something decent.
March 17th, 2017 6:52pm
Yes, you should aim to have at least a year's worth of funds, accumulating this should take priority over discretionary spending when you are in work.
March 17th, 2017 6:56pm