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A Tax-Free Way to Free Up Needed Cash Flow

Published on: 08:48AM Aug 26, 2008

By Jim Wiesemeyer

via a special arrangement with Informa Economics, Inc.

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Allow 401k and IRA participants to tap some savings interest & tax free

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


I frequently give speeches throughout this great country, and I always like the questions asked and the comments made on a host of topics. One topic has been brought up in various ways by several people -- and it should be an idea that lawmakers and the White House should at least consider if -- as is likely -- another economic stimulus is needed.

The suggestion: Allow 401k (and IRA) participants the opportunity to tap up to $5,000 (or, pick a number) without penalty and tax free. There would be few short-term budget impacts and the money would help many middle incomers cope with a host of rising costs and must-make payments.

There could be some stipulations on the use of the payment, but whenever I am asked about it, I at least think that would be a fast approach to getting cash flow to those most in need.

Every upside has a downside, as some would say savings are a must for long-term financial planning. But a $5,000 tax-free pullout of what is non-government money anyway could be just the thing needed to bolster an anemic economy.

Your comments?


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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