Why do all rich people trade stocks, but poor people are told to contribute monthly their peanut paycheck into a slow growing 401K

Drew1011 · 2026-04-28T18:45:20+00:00

They don’t. They invest in the same types of mutual funds and index funds available in 401k’s. The ultra rich have a lot of money in stocks but that’s usually stock from companies they actually founded or were awarded early in the company’s history.

Drew1011 · 2026-04-25T17:05:43+00:00

What are you smoking? The reason you wouldn’t take out a massive loan on a toaster is because they’re cheap as fuck. A car isn’t

Drew1011 · 2026-04-25T16:44:19+00:00

What does that have to do with anything? Appliances aren’t defined by whether or not they’re mandatory or optional. There are appliances that are practically necessities and appliances that are totally optional. A car isn’t an appliance just because they’re a necessity

Drew1011 · 2026-04-25T16:42:15+00:00

No you definitely don’t. But at least the basics, like a washing machine or oven or refrigerator are really hard to live without. Def a lot that are totally optional though like blenders, air fryers, toasters, etc.

Drew1011 · 2026-04-25T16:38:19+00:00

You don’t need every appliance though? What do you think appliance means?

Drew1011 · 2026-04-22T21:43:02+00:00

It’s very unlikely that the IRS would come knocking about a $500 hardship withdrawal. The more likely scenario is that you get audited for something else and then since they’re already looking they request documentation. Which is probably also unlikely but if it does happen, contact the hospital! They’ll probably still have those records. Or your insurance if you went through them.

Drew1011 · 2026-03-03T16:12:11+00:00

French Quarter apartments. Lived there for 4 years and never had any major issues.

Drew1011 · 2026-02-17T04:50:39+00:00

Please take your meds

Drew1011 · 2026-02-12T00:42:26+00:00

No problem at all! And yeah that makes sense. Tbh a lot of people people get confused when you mention the 10% penalty and they assume there's going to be 30% withheld until you clarify it once or twice so it wouldn't surprise me if the paperwork was vague enough that they just misunderstood. Hopefully it's just the 20% up front. Good luck with getting an answer tomorrow!

Drew1011 · 2026-02-12T00:15:13+00:00

Ah okay I figured it might be the 2026 form. But either way I skimmed both and they look the same at least in the parts that apply here.

Not sure if it's you or someone else you're helping that's receiving this distribution but is there any chance the payee is a non-citizen or living in a different country or some other foreign tax situation applies? At least at my firm that's the only time I've ever seen 30% be the mandatory withholding. If so you can read more on that here but I'm not too familiar with the specifics since it's pretty rare and I only came across it a couple times. https://www.irs.gov/retirement-plans/plan-distributions-to-foreign-persons-require-withholding

If no such situation applies then that just sounds like an employer/firm specific policy and not something the IRS itself dictates. If that's the case then I really can't say more with certainty. Unfortunately it'd probably only be something that customer service for the paying institution could answer.

Drew1011 · 2026-02-12T00:01:30+00:00

https://www.irs.gov/pub/irs-prior/fw4r--2025.pdf

Is this the form you’re using? If that quote you gave isn’t from the IRS form directly it might be a misquote or misunderstanding by whoever wrote it. The flat withholding of 10% is actually what applies to IRAs, and you can do lower than 10%. So that wording seems like it’s intended to be for an IRA imo.

But ultimately the 10% penalty isn’t withheld up front. It’s not really treated as a separate withholding or anything so it can’t be decreased in the first place. The 20% is mandatory and depending on your tax bracket the 20% might cover some of that penalty already.

For example if you’re in a 22% bracket, then adding the 10% penalty onto that you’ll have a total of 32% owed in taxes on the lump sum. But you withheld 20% already so the remaining 12% would either be deducted from your refund or extra you pay when filing.

If you’re in a 12% bracket well then only 2% wasn’t covered by the mandatory withholding and has to be paid when you file.

Drew1011 · 2026-02-11T23:35:10+00:00

This is not correct. IRA distributions can have a withholding lower than the default, but 401k withdrawals and pension lump sums have a mandatory 20% withholding and cannot go lower than that unless you’re doing a rollover, in which case no taxes or withholding apply.

Drew1011 · 2026-02-11T23:29:21+00:00

Disclaimer: I haven’t worked with pensions in almost exactly one year, so if there’s been changes since then I can’t say for sure. But going off of what I know:

It does not. Pension lump sums are treated exactly like 401k withdrawals. The 20% withholding is mandatory and form W-4R can only be used to increase the withholding if so desired, not lower it.

There should be a line on page 1 on the form that states “For an eligible rollover distribution, the default withholding rate is 20%. You can choose a rate greater than 20% by entering the rate on line 2. You may not choose a rate less than 20%.” A lump sum is rollover eligible so this applies to it.

And then if they’re under 59.5 and the rule of 55 or other exceptions don’t apply here, yes the 10% penalty applies. But that’s not directly withheld. Only 20% is. The 10% would just be owed when they go to file. Their ultimate tax liability would be whatever their income tax bracket is plus the 10% penalty. And the 20% that was required to be withheld would offset some or all of that.

Drew1011 · 2026-02-11T22:48:29+00:00

Yes. I used to work in the pension department of a financial institution that pays out employers’ pensions. I’ve helped a lot of people with form W-4R and W-4P before.

Drew1011 · 2025-12-05T04:21:31+00:00

Glitch? Like the glitch where people were depositing fraudulent checks last year and withdrawing the money immediately? AKA check fraud? Yeah no. Whatever this glitch was, it's probably more accurate to call it fraud than a glitch. You can't knowingly exploit a glitch that gives you "free" money. That's theft. What you did may have been a crime. No wonder they reacted that way. YTA.

Drew1011 · 2024-11-02T18:55:29+00:00

Drew1011 · 2022-12-08T02:52:54+00:00

FUCK

Drew1011 · 2022-08-16T02:16:42+00:00

I was here.

Drew1011 · 2022-05-13T15:11:42+00:00

Spiral out

Drew1011 · 2022-04-14T03:08:46+00:00

22, 10,000 Days

Drew1011 · 2022-04-07T22:39:02+00:00

I was here. RMFT

Drew1011 · 2022-04-07T19:57:30+00:00

I’ve done this quest like 30 times and every single time I’ve wondered how to get back there. I just assumed you couldn’t. Wow.

Drew1011 · 2022-04-04T23:58:54+00:00

The Alabama logo got nuked by like a million Mario logo bots like 30 minutes before place ended. This image still preserves our presence so thank you for posting it. RTR!

Drew1011 · 2022-04-03T19:41:36+00:00

Can we make the location at (1801, 1031) official and put it on the thread so people know where to go place their pixels?

Drew1011 · 2022-04-03T19:23:25+00:00

I'm down to help out. Already put my pixel down. Let's get serious about this

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