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View Poll Results: Do you count gains in your 401(k) as income?
Always 0 0%
Never 29 96.67%
Enron - ie, only if I need to "fluff" my income 1 3.33%
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Gains in 401(k) - income?
Old 10-13-2006, 10:30 AM   #1
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Gains in 401(k) - income?

Obviously, not for income tax purposes. I mean when you compare your household income to BLS statistics, or when you consider mortgage affordability, or any other time you need to come up with a number for "gross income".

Just curious.
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Re: Gains in 401(k) - income?
Old 10-13-2006, 10:40 AM   #2
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Re: Gains in 401(k) - income?

Maybe I'm dense today (Friday 13th?), but I do not understand your question.

Would you mind rephrasing it?
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Re: Gains in 401(k) - income?
Old 10-13-2006, 10:48 AM   #3
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Re: Gains in 401(k) - income?

I'm a former Enron employee...actually a retiree (forced at termination after 5+ years back in 12/2001).

None of my 401k was in Enron stock, thank you. I transferred it immediately on receipt into PIMCO total return...and am just now transferring it to a Vanguard IRA (4 years later).

So...I don't understand the question either.

pp
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Re: Gains in 401(k) - income?
Old 10-13-2006, 12:07 PM   #4
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Re: Gains in 401(k) - income?

Quote:
Originally Posted by pfpelican
I'm a former Enron employee...actually a retiree (forced at termination after 5+ years back in 12/2001).

None of my 401k was in Enron stock, thank you. I transferred it immediately on receipt into PIMCO total return...and am just now transferring it to a Vanguard IRA (4 years later).

So...I don't understand the question either.

pp
I didn't mean literally...

Suppose you're on a fishing trip with total strangers. Some bigmouth starts asking everyone how much do they make. Do you state your salary, plus rental income (if you have rental real estate) and 401(k) returns? I meant, inflate your "income" the way top Enron execs might have been tempted to?

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Re: Gains in 401(k) - income?
Old 10-13-2006, 12:09 PM   #5
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Re: Gains in 401(k) - income?

Count me as confused, also.  If ya wanna compare to BLS data, wouldn't you just measure [i]earned[i] income (wages, salary, etc.)?  Alternately, it could make sense to count 401k contributions as income vs. BLS data as these are technically [i]deferred[i] compensation.  Investment gains (401k or otherwise) would only make sense to me in measuring net worth.

Edit: one day I'll figure out how to properly use the italics button, for now, I just found the edit feature!
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Re: Gains in 401(k) - income?
Old 10-13-2006, 12:37 PM   #6
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Re: Gains in 401(k) - income?

Quote:
Originally Posted by jazz4cash
Count me as confused, also. If ya wanna compare to BLS data, wouldn't you just measure earned income (wages, salary, etc.)? Alternately, it could make sense to count 401k contributions as income vs. BLS data as these are technically deferred compensation. Investment gains (401k or otherwise) would only make sense to me in measuring net worth.

Edit: one day I'll figure out how to properly use the italics button, for now, I just found the edit feature!
Oh, agreed. That would be correct.

I saw a post on a different discussion board where someone appeared to be counting 401(k) returns when totaling their gross income. It made me curious to find out if that was widespread. I put the poll over here on this board, because, frankly, this is the only group where I look to for usefull information. I always assumed that folks here were not including 401(k) gains as gross income, and it looks like the poll results so far are backing that up.

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Re: Gains in 401(k) - income?
Old 10-13-2006, 12:45 PM   #7
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Re: Gains in 401(k) - income?

When I was working, I considered the matching contribution to be part of my compensation.

But counting gains in the 401K is probably silly. May as well also count capital gains on a house you bought with the money you earned from the job. Or gambling winnings if you take your paycheck to Vegas.

Grey area might be where the 401K isn't vested yet, but you would get to keep earnings on the employer matching contributions? Not sure if that even happens.
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Re: Gains in 401(k) - income?
Old 10-13-2006, 02:24 PM   #8
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Re: Gains in 401(k) - income?

Quote:
Originally Posted by slepyhed
Suppose you're on a fishing trip with total strangers. Some bigmouth starts asking everyone how much do they make.
I don't know what we're fishing for, but I'm gonna presume the "bigmouth" is a human. If not then I'd practice catch and release. That might work with the human too.

Quote:
Originally Posted by slepyhed
Do you state your salary, plus rental income (if you have rental real estate) and 401(k) returns?
I'd say "The Navy pays me about $36K/year" and pass the conversational baton to someone else.

Privately I'd be thinking "Eh, rude wot, ya?"

Quote:
Originally Posted by slepyhed
I meant, inflate your "income" the way top Enron execs might have been tempted to?
Well, gosh, if Enron execs did it then what kind of example would it set?!?
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Re: Gains in 401(k) - income?
Old 10-13-2006, 02:39 PM   #9
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Re: Gains in 401(k) - income?

Quote:
Originally Posted by slepyhed
I didn't mean literally...

Suppose you're on a fishing trip with total strangers. Some bigmouth starts asking everyone how much do they make. Do you state your salary, plus rental income (if you have rental real estate) and 401(k) returns? I meant, inflate your "income" the way top Enron execs might have been tempted to?
Nope, just gross salary. Of course, I don't generally blurt out how much I make to anyone; except on a few financial websites.

So, maybe the question is: Suppose you are online at REHP with total strangers...

Karen
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Re: Gains in 401(k) - income?
Old 10-13-2006, 02:40 PM   #10
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Re: Gains in 401(k) - income?

Hmmm

I 'might' be tempted to er ah inflate my income - if she was a hot young young 60 year old and looked 'availible'.

heh heh heh heh heh heh heh - bad bad bad.
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Re: Gains in 401(k) - income?
Old 10-13-2006, 03:00 PM   #11
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Re: Gains in 401(k) - income?

The reason you confused everyone is because you just said "income."

There is earned income, unearned income, realized income, unrealized income, taxable income, gross income, adjusted gross income, modified adjusted gross income, etc, etc, etc.

So, do I count gains in a 401(k) as income? No. Not until I take a distribution from that 401(k).

Do I count it as an increase in my net worth? Yes. I look at the FMV of the 401(k) when I calculate my net worth.
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Re: Gains in 401(k) - income?
Old 10-13-2006, 03:12 PM   #12
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Re: Gains in 401(k) - income?

I certainly consider dividends fromt the stocks in my IRA (no 401(k) at the moment) to be income. However, it is non-taxable, unearned, and not accessible without penalty. Increases in value of those stocks is similarly non-taxable, unrealized capital gains not accessible without penalty.

But when asked for my income I usually just quote base salary. I ignore all other income, which is perhaps 10-15% on top of my base salary.

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Re: Gains in 401(k) - income?
Old 10-22-2006, 04:43 PM   #13
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Re: Gains in 401(k) - income?

I just tell people how much I earn on the job. I will receive about $5000 this year in dividends and interest which could be considered as income, but I feel it's too small to mention. I don't consider long-term appreciation of my assets as income.
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