Cash from the Bank, taxes, 401K, Social Securitygreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I have read all the threads in this forum relating to taking cash NOW from the bank. I'm still left with a few details and need specific advise/suggestions.
1) Cash: What's the best way to handle the practical issue of withdrawing large amounts of cash? Read great (devious) ways of hiding or stashing the cash once it is home from the bank. What is the best way to carry thousands of dollars between the bank and your home? Several grocery bags? A cardboard box? Hire an armed guard? Best assortment of denominations? Advise the bank ahead of time of large cash withdrawal, so they will have it on hand?
2) Timing: I'm soon to retire. If I cash out my retirement benefits (401K), and apply for social security (at least get SS benefits for 1 year before the crash of 00), I'm over the earning limit and will not receive any SS benefits. Any advise/suggestions here regarding timing of all this? If I take all my 401K and cash it in I lose about 28% to the Fed in taxes. It's now income, and I lose SS because I'd be over the earning limit. Seems I lose big $ no matter which way I turn. Timing, as I see it, is important.
In getting ready for Y2K and beyond, I'd sure like to have as much of my cash as possible. Why give it to the Fed when I need all I can get now to put into preparations? Most of you are already prepared or well on the way. I and my family are gearing up for a crash course for preparing for a move to a new location. I need your advise/suggestions from those here who have been there/done that.
-- lizzard (firstname.lastname@example.org), November 03, 1998
Small bills (1,5,10), $500 or less at a time, in your front pockets, fire proof safes in odd places. Buy some silver (for spending) and gold (for saving/investment)and bullets (to protect it).
-- Bill (email@example.com), November 03, 1998.
Large cash withdrawals already put you on a gov't hit list. "Money laundering" several smaller withdrawals are "structuring". This means FORFEITURE (if they can find you and the $).
do internet search on "asset forfeiture" + "Cash" + "Banking"
Isn't it great living in a "FREE" country?
-- anon (watchit@@boo.com), November 03, 1998.
1. Roll the 401K over into a self directed IRA.
2. Within the IRA you can invest in gold and you can hold T-Bills, all without getting into the tax bit. Heck, you can even buy a Swiss annuity in an IRA. This gives you the flexibility to set up accounts to deal with either depression (cash is king, T-Bills are the next thing to cash, and a Swiss annuity is probably safe, although I'd worry about the wire transactions needed to bring the money home if I were to need it......only risk money that you can take your time getting your hands on to foreign holders), or hyperinflation (which would make gold more valuable, and from which holding foreign currency would protect you). I'd suggest actual T-Bills, rather than funds that invest primarily in short term government securities because there is one less financial agency (the fund) to worry about. Some banks (Mark Twain in St. Louis and City Bank, for example) offer foreign currency accounts that would help protect against extreme inflation in the dollar. If your account survives these might be interesting plays.
The key is to be able to move the money where you want it, and you can do that within an IRA.
Choose your IRA holder carefully. The big firms (Prudential, Merrill Lynch, Schwab, Quick& Reilly etc.) will probably survive. You can also set up IRA accounts with banks if you believe they (it) won't be effected.
3. Withdraw what you require for Y2K preparation and in order to feel comfortable about the amount of money you have on hand. I wouldn't be concerned about showing up on a federal list: just making a large cash withdrawal will get noted, but that's the least of your worries. Do be concerned about transactions that can be considered 'structured:' it's better to make one large one and sign the paperwork than to risk seizure.
Just some thoughts......and yes, I've been there.
-- rocky (firstname.lastname@example.org), November 03, 1998.
Can anyone give references to the rules & regs on 401-k accounts?
Wonder if partial withdrawal would be possible without taking too much of a hit...
-- Tom Carey (email@example.com), November 04, 1998.
One of the reasons why I have posted my question is what has happened recently to me regarding my 401K account. In anticipation of Y2K I chose to take out a loan from my 401K. By taking a loan, you are not taxed. It's your money, and you are obligated to pay back this loan. Your plan administrator can give you the details.
My action was great until I unexpectedly got laid off! Now I need either to pay the money back (before the end of the year) or getted socked with a wopping tax!
BTW, I have posted elsewhere on this forum using my real name. Am I getting paranoid? Now I am the "lizzard." Anyone else been there/done that?
-- lizzard (firstname.lastname@example.org), November 04, 1998.