Hurricane Harvey IRS Exemption for Retirement Plan Withdrawals

Discussion in 'Retirement Planning Forum' started by scagnt83, Sep 1, 2017.

  1. scagnt83
    Offline

    scagnt83 Guru

    Posts:
    6,543
    Likes Received:
    34
    State:
    South Carolina
    I agree, and am very glad to hear your sister did not lose her house!

    Im not sure if there are any stats or not. It would be hard to track or even quantify from a "success rate" standpoint. If they dont pay it back, but have a home/car/clothes/job .... is that a failure or success in this circumstance?


    I do see your point. People would be behind on retirement savings, thus forcing them to delay retirement or maybe not be able to retire at all. When you have tens of thousands doing this in the same city, one can only imagine what negative affects it will have long term on the work force. On the flip side... you cant have a work force at all unless those workers have homes to live in and clothes on their back.
     
  2. DHK
    Offline

    DHK Guru

    Posts:
    6,171
    Likes Received:
    77
    State:
    California
    I'm not the best student of history... but I wonder what would've happened if Harvey happened in the 60's - before 401(k) plans? (They were introduced with ERISA in the early 70's, if I remember correctly.)

    It's not like pensions are liquid.
     
  3. scagnt83
    Offline

    scagnt83 Guru

    Posts:
    6,543
    Likes Received:
    34
    State:
    South Carolina
  4. jboussea
    Offline

    jboussea Guru

    Posts:
    417
    Likes Received:
    6
    Define "affected by the hurricane" ..

    I'm in MA . .I know people in TX .. does that count. I would love to make use of my 401k money right now.
     
  5. VolAgent
    Offline

    VolAgent Guru

    Posts:
    13,268
    Likes Received:
    66
    State:
    Tennessee
    Most people had money in the bank or under the mattress. Savings wasn't just a catchy phrase.

    As a banker, you should have seen that your Depression Era clients generally kept much more liquid or near liquid savings than any other group.

    If we are going to go all negative here, let's lay it all out. If it wasn't for legislation and IRS rules restricted access to 401ks and IRAs, most people wouldn't have even the small balance they do.

    I will never forget the agent I worked with at Mass when I first started. His father was the branch manager. We were having lunch with a prospect and when the guy brought up savings and liquidity, he just said he'd borrow from his home equity. This was back in 2009 or so.

    When life goes bad, banks are not going to be standing in line to loan you money, having some savings is a good thing.

    The IRS restricting access to retirement savings is a good thing, and loosening access after a major disaster is also a good thing.
     
  6. DHK
    Offline

    DHK Guru

    Posts:
    6,171
    Likes Received:
    77
    State:
    California
    Not really. For SoCal (especially South OC with lots of "affluence"), those that had more liquidity and larger balances were entrepreneurs and those who had businesses with more liquidity & cash flow needs. We rarely had "Depression Era" clients.

    Some of those people did have their homes paid off - and were brought in with their adult children to sign home equity papers for their baby boomer children to borrow (those weren't fun). But they relied heavily on social security income and pension income, and a small bit of savings - perhaps $25,000 or less. Not really that much.

    SoCal has earthquakes and fires, but not much else for weather patterns. And the more favorable weather contributes to the higher cost of living here.
     

Share This Page