【美国理财点滴之四】针对前三篇的问题与回答

谢谢各位朋友的阅读，谢谢朋友们的反馈和提出的问题。我想在这儿把大家的问题和我的回复集中起来，以便和大家分享。

(1) Question: 如果你在55或55岁以后离开了你服务的公司，那么你支取401k就不用付10%的罚款。Does this rule apply to the balance rolled over from the 401k account(s) with previous employer(s)?
Answer: Yes, this rule applies to the entire balance in your current 401k account including the portion that is rolled over from your previous 401k account(s).

(2) Question: If your income is low when you withdraw the 401k, the income tax will be less?
Answer: That's right. But the income includes the 401k distribution. So for those people with low income, it makes more sense to contribute to Roth IRA or Roth 401k instead of their traditional versions, unless you believe that Uncle Sam would be nice enough to low your tax rate by the time you get retired.

(2) Comment: Taking a loan from 401k is not the purpose.
Response: No and it will never be. The intention of any retirement plan is to keep your money there till the time you get retired.

(3) Comment: If you had to leave your company, you have to pay back the entire balance. Otherwise the default loan will be taxed with extra 10% penalty.
Response: Good point. But the purpose of my post is to explain that the so-called double taxation is not an issue. Typically, if you leave your job, it is not uncommon for plans to require full repayment of a loan within 60 days of termination of employment. You know the 401k administration fees are high. So if you feel you will leave your job soon for any reason then it may not be a good idea to take a loan from your 401k account, but each employer is different, better check with your plan administrator.

(4) Question: When you pay back, you pay tax for both interest incurred and the principal you borrow from your 401K. So you pay tax twice (35% x2=70% of your money). This is what I heard from my agent. Not sure the same applies to yours or not? Find it out, let us know.
Answer: That's exactly what my post tries explain. You have to pay tax twice on your principal, which is totally fare because you did not pay any tax on the money you borrowed. On this issue I believe your agent is wrong. Since all the money is yours, "borrow" really means "earn" or "spend". Just imagine that you borrowed $1,000, which had never been taxed, if you put back $1,000 plus interest without paying the tax either, and then after retired you withdrew that $1,000 and paid the tax on it. So you ended up just paying the tax on the second $1,000 of the total $2,000 income. IRS is not a fool :) The principal is not an issue. My post has an example to demonstrate that loan from 401k tends to have lower interest cost even if the interest is taxed twice.

(5) Comment: HELOC interest rate is at historically low, 2.4%-4.5%, not 7%.
Response: I tried to apply for an HEL or HELOC myself a short while ago (in May 2009) and what I got was above 8%. By the way, my credit score is over 800 and my LTV is much less than 80%. Please share your information if you know any HELOC program with such a low rate, I'll buy you a lunch:)

【美国理财点滴之一】如何从401k取钱而不被罚款
【美国理财点滴之二】从401k 贷款真的不划算吗？
【美国理财点滴之三】Roth IRA 转换的良机