A Senior Bail Out?

[Rustic23]

OK, this will show I am not a financial genius, but it would seem to me that a good way to calm things down would be to allow the conversion of IRA's to Roth IRA's tax free. You could limit it is various ways. Maybe only for folks over 40 or 50. Allow the conversion for only six months or a year, so new money would be treated as normal IRA. Maybe only funds as of a certain date.

For me, money I take from my IRA is in the 25% bracket. Just about the amount I have lost in the market.

Mods: I did not search this so if there is a prior thread like this feel free to delete this.

 

[38Chevy454]

While I may like the idea, it has no chance of happening. It will be viewed as a give away to the wealthy. Political lead balloon.

 

[Rustic23]

Set a limit on how much you can convert. Sell it as a bailout for the average person as they have their retirement in IRA's and employer plans.

 

[zinger1457]

Agree with the above, no chance. With all the businesses temporarily closing and people out of work, and additional health care cost, it's going to require a very expensive government assistance package, probably to the level we've never seen before.

 

[OldShooter]

Agree on some kind of package. Inevitably it will be our kids and kids' kids who will have to pay the money back. That is the problem with most of these good-sounding ideas. It is never said where the money would come from.

 

[Rustic23]

Agree there will be a bailout. It will depend on who votes, and who contributes, more than on who needs it, or where it is needed most.

 

[copyright1997reloaded]

A better chance would be a one-time tax free withdraw from IRA's/401k's up to a certain $ amount for those who have been 'impacted' by the virus (lost job, medical, ...) Since it will be extremely difficult to determine impact, maybe just for all.

 

[Midpack]

OK, this will show I am not a financial genius, but it would seem to me that a good way to calm things down would be to allow the conversion of IRA's to Roth IRA's tax free. You could limit it is various ways. Maybe only for folks over 40 or 50. Allow the conversion for only six months or a year, so new money would be treated as normal IRA. Maybe only funds as of a certain date.

For me, money I take from my IRA is in the 25% bracket. Just about the amount I have lost in the market.

How would you propose making up the lost (tax) revenue? I always wonder why people are quick to propose actions that will increase government spending or reduce revenues without any explanation of how to offset additional deficits. As a group overall, seniors already have a lot of $ advantages, and I'm not in favor of adding to that.

 

[Sunset]

Agree on some kind of package. Inevitably it will be our kids and kids' kids who will have to pay the money back. That is the problem with most of these good-sounding ideas. It is never said where the money would come from.

I find this is the way with many Gov't things, but that never stops them... of course I live in IL.

 

[OldShooter]

I find this is the way with many Gov't things, but that never stops them... of course I live in IL.

The impending bankruptcy of Chicago and of the state will at least slow them down.

 

[Lewis Clark]

Agree on some kind of package. Inevitably it will be our kids and kids' kids who will have to pay the money back. That is the problem with most of these good-sounding ideas. It is never said where the money would come from.

No, it will be our kids who have to pay the interest on the borrowing. Our government is too irresponsible to balance the budget.

 

[USGrant1962]

OK, this will show I am not a financial genius, but it would seem to me that a good way to calm things down would be to allow the conversion of IRA's to Roth IRA's tax free. You could limit it is various ways. Maybe only for folks over 40 or 50. Allow the conversion for only six months or a year, so new money would be treated as normal IRA. Maybe only funds as of a certain date.

For me, money I take from my IRA is in the 25% bracket. Just about the amount I have lost in the market.

Mods: I did not search this so if there is a prior thread like this feel free to delete this.

I don't see how this would calm anything. Only a fraction of seniors have substantial IRAs, and an even smaller fraction know what a Roth conversion is. And a conversion does nothing for the market, nor does it put cash in anyone's hands.

If tax rebates/refunds/cuts are a good solution (I'm not saying they are), the payroll tax holiday is a much better way to get cash into people's hands.

 

[RunningBum]

This makes zero sense. Do things to help the economy, like helping out businesses that may have to close, or people who get laid off from this. This kind of aid will help the market recover and do a lot more good.

 

[Midpack]

No, it will be our kids who have to pay the interest on the borrowing. Our government is too irresponsible to balance the budget.

Thanks to voters (mostly our generations). Any politician that runs on more responsible spending/cutting deficits loses. Many candidates now say they will increase spending AND cut taxes in some form or another (often claiming they'll make corporations and the rich pay, and then don't if elected) - and gullible voters buy it over and over again. Politics is the art of bribing us with our own money, we've taught candidates that. We get what we deserve...

 

[Rustic23]

How would you propose making up the lost (tax) revenue? I always wonder why people are quick to propose actions that will increase government spending or reduce revenues without any explanation of how to offset additional deficits. As a group overall, seniors already have a lot of $ advantages, and I'm not in favor of adding to that.

How did they offset the 8 billion, or the trillion in 2009? Are they talking about offsetting any plan under consideration today? My guess is NO. I fully agree with you that government giveaways should be offset. However, for the most part they are not.

They are going to go the helicopter route for cruise lines, airlines, hourly workers, small business, etc. Why not the retiree or soon to be for the 20 to 30 percent loss taken in their savings. Letting a them convert their IRA's might make up for the loss in value. I have no idea what the loss to the government would be, as it would depend on the amount held in IRAs vs non ira accounts. It would also depend on the structure, and the amount converted.

 

[Midpack]

How did they offset the 8 billion, or the trillion in 2009? Are they talking about offsetting any plan under consideration today? My guess is NO. I fully agree with you that government giveaways should be offset. However, for the most part they are not.

So you agree (and offer your offset for your tax giveaway) or you don't?

 

[Go-NoGo]

None of this will add money to the economy immediately. This is fear driven event causing real economic disruption. The fear will have to dissipate, the infection curve has to flatten first. Save the economic bazooka when people can return to some sense of normality and then give them money to spend, only then will you see some effect.

 

[Texas Proud]

Sorry, but stupid idea...


This does nothing for the economy... just moving some money from one investment account to another investment account and not collecting taxes...


I do not see anything that would pass that allows no taxes to be paid... they might waive penalty for people who take out money early, but still have them pay taxes...

 

[Rustic23]

So you agree (and offer your offset for your tax giveaway) or you don't?

Of course I agree. I said I did. And, they should apply the same offset to this idea they do with any other they pass.

 

[Amethyst]

Perhaps offer a holiday from having to take RMDs (as was done one year during the last recession). That is all I could accept as fair.

Old people as a group are not politically popular just now, and there are other, greater needs to address.

 

[Lewis Clark]

Thanks to voters (mostly our generations). Any politician that runs on more responsible spending/cutting deficits loses. Many candidates now say they will increase spending AND cut taxes in some form or another (often claiming they'll make corporations and the rich pay, and then don't if elected) - and gullible voters buy it over and over again. Politics is the art of bribing us with our own money, we've taught candidates that. We get what we deserve...

I agree completely.

 

[MichaelB]

Do things to help the economy, like helping out businesses that may have to close, or people who get laid off from this. This kind of aid will help the market recover and do a lot more good.

I agree with this.

 

[Siestatime]

What about raising the capital loss write off from $3,000 to $6,000, $8,000 or your total tax due? This would apply to all taxpayers (not just seniors).

It would accelerate credits the federal government would eventually pay out to taxpayers anyway, and is an efficient, immediate (by April 15) way to get or keep money in consumer’s hands.

 

[Independent]

I can think of many things that might justify having the gov't borrow more money in this situation. Let's say time-off pay for low income workers who are staying home with kids, or staying home because they are sick.

Lowering taxes on seniors with lots of money (IMO, 25% marginal tax bracket indicates a lot of money) is way at the bottom of my list.

As long as my SS benefits keep coming, I'm in better shape than many workers.


That said, this thread probably belongs in "FIRE related Public Policy".

 

[statsman]

A lot of people are going to see reduced wages or maybe no pay at all for a period of time. Seems like these people are going to need the most help. At least with seniors who are retired/FIRE'd, this shouldn't matter as much. Social security, pensions, RMDs, cash reserves, etc.