Investing? Cashing out? Holding steady?  I was thinking of cashing out and putting it into property. Yes early withdraw which means to pay the taxes. But better then a 100% loss?

Is the stock market about to go to 0?

Is it finally fo time?

In all seriousness, don't do it.

401 (k) is LONG term investment/gamble. If you think somehow, the dow is going to zero, and going to stay there, then your 401(k) is the very LEAST of the problems that you/we are about to deal with. If you think cashing out at a 50% loss, buying dirt, and holding it for (since I don't know your age) however long it is until retirement will somehow beat the long term market average of 7% per year... could it happen? yes. Odds? slim.

I'm currently maxing it and a roth IRA. I"m 24, time is on my side in weathering another financial disaster. Your situation might be different.

Nothing but it's in all cash for now. The market is due for a big pull back. The fed is already ending QE and you can see it in commodity prices like silver and oil. I used to be very pro stock market but the fed has really ruined it for me. It's not about market fundamentals so much anymore. It's all about monetary policy now. Look at a chart of the Dow going back to the 80s and compare the trade volume prior to the crash in 2008 to now. Volume is in the dirt. The average investor doesn't trust the stock market anymore. You can thank the fed for that.



   

I have mine in Vanguard mutual funds. If there is indeed a big pull-back in the market, then I'll move it into index funds for the rebound.

If you cash out your 401k early, you'll take a 50% hit. To recover from a 50% loss, you need a 100% gain. The math is not on your side.

You can see the volume decline pretty clear in this chart





http://www.marketwatch.com/investing/index/DJIA/charts?symb=DJIA&countrycode=US&time=20&startdate=1%2F4%2F1999&enddate=10%2F24%2F2014&freq=1&compidx=none&compind=none&comptemptext=Enter+Symbol%28s%29&comp=none&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=2&style=1013

 

Unless you have some 100% guaranteed intel, I would be very careful.
Decisions also depend on how long you have to retirement.

This topic came up in 2008.

My BIL stopped contributions and took money out of his 401K (I think a loan) during the 2008 crash.
My BIL is an idiot.

I increased my contributions and I am in much better shape than i was in 2007.

If you are concerned, perhaps you could move money to a less volatile position.

This is perhaps a better sub-forum to discuss financial issues.

Time is on my side. I'm investing as much as I can.

I'm only 32 so unless you've got a crystal ball that shows the market is going to be shit in 33 years I'm going to keep it right where it is, plus normal contributions.

Seriously, why does everyone feel like they need to pull out every time the market dips?  It happens.  It's always happened.  It always will happen.  If the market REALLY crashes then the paper that you cash out of it won't be worth shit anyways.  If it doesn't REALLY crash then it will recover like it always does and you will come out ahead.

"The way to make money is to buy when blood is running in the streets." - John D. Rockefeller

Unless you're on the verge of retirement, dips are opportunities.

Invest.

It's all about asset allocation and risk.

Max out employer match in 401K
Max out Vanguard Roth IRA
Taxable Brokerage account holding dividend producing stocks which are reinvested
Taxable P2P account that I'm trying out.

Why would you pay tax + penalty to cash out? That is a huge hit, 35% or more. The "market" would have to drop the DJIA to 10,000 or so before you even came close to that loss.

whats a 401k?    actually i do know what one is but do not have one.


i assume you have an employer that matches in some fashion? if so how much %?

you could just stop contributing and leave whats in their alone?

can you finagle a hardship somehow under the rules for early withdrawal and not take the punitive tax hit?

lots of variables i would think before i would take the tax hit.  not saying you should or shouldnt.

if it keeps you up at night and stresses you out to no good end.   pull all of it out.  aint worth it at the point imo.

i would bet my life and my wife and children that the dow will never drop below 10,000..........

Hypothetical supposition:

1. Boomers are the largest generation...

2. They are approaching age where more medical care is needed.... we see the system groan, and for many, break.

3. They need to cash out their stock holdings as they retire...

4. Do we see a sustained period of stagnant stock markets as a result? Or declines as a result?

Just something I think about from time to time. What do you guys think about this?

While the boomers are starting to retire and will be drawing on their retirement accounts, I actually read the other day that the millennials are investing more than their parents which is helping to keep the market higher. In the 50's and 60's someone invested 10% of their $9,000 annual salary, it's only $900. Today someone invests 10% of their $50,000 income and that is $5K. That makes more cash flow into the market pushing it up.

By all means if you're REALLY worried, put some in a cash equivalent fund. I personally wouldn't pull it out and pay the taxes + penalty.

I wouldn't say REALLY worried, just something that I think about from time to time. I am in fact continuing to increase my 401k contributions on 6 month intervals (ie, 1% bump every 6 months) with the goal to finally hit the IRS max contribution limit within a few years...

I would also advocate having at least a portion of your 401k invested in a cash equivalent fund reflecting your age/risk tolerance. But first, I would also advocate that folks have 3 to 6 months of cashed squirreled away in banks or socks or a safe (just don't lose the key and make another GD safe thread).

It's like a bucking bronco, you stay on as long as you can.  I'm 53 and am holding on for the ride. Short of a complete worldwide economic collapse it's a better bet to keep it in than cashing it out and take a certain 40% loss.

Turned mine into a .223.

Seriously though I prefer land as my main investment.

Last year, near the end of the year, there was a discussion that included a method to contribute to a Roth IRA for folks who are normally ineligible.  I think it involved buying a new, small IRA and then converting it immediately to a Roth so that you only paid taxes on gains during the short window between conversions.

Can someone point me to some info on that - I can't find the old thread, and am not sure what I should be searching in google.

(sorry for the derail, OP)

The .gov CAN'T end QE, at this time. Don't believe ANYTHING the Fed ---or they--- say.

It would throw this country into economic circumstances that would make the GD1 look tame.

Of course, once the Leftist's controlling our .gov have the -battlefield of stealing our country- fulling prepped, then sure, they will end EQ to destroy us fully, to get the Sheeple to trade the Constitution for food.

You're looking for a "Backdoor Roth IRA"

http://www.nerdwallet.com/blog/finance/advisorvoices/back-door-roth-ira-contributions/

What am I doing? Nothing till I get closer to retirement in about 10 years.

If you think that you can time the market you are seriously wrong.  
Just invest over time (dollar cost averaging), be diversified, and stick with your plan.  Max out on your 401k.  

Your age means a lot. If you are young you should stay in it. You have time to recover any looses. Does your employer match? If so you need to consider the fact that you are up by that much as long as you stay in. If it's too unnerving for you put the money into a moderate account. Even with the looses this quarter I'm still up 50K over last year.

My 401k earned 13% in the last year (other people manage to get more) and if I cashed out last year when people were talking about cashing out I would have not only lost all the penalties I would have payed on cashing out but I would have missed out on that 13% as well.  

My IRA is in cash.  I don't trust the market.  I am sure I am missing opportunities for my investment to rise, but at the same time I do not have to worry about the market falling.  I realize that I am loosing purchasing power due to inflation, and I can not stay in cash forever, but I am not comfortable investing in stocks now.
I went to cash early last year for what it is worth.  I am aware this has cost me money I could have made, but I am still comfortable with this decision.

kids today, i swear...

http://www.ar15.com/forums/t_1_5/1578081__ARCHIVED_THREAD____How_Old_Where_You_when_Your_401K_Hit__100_000.html&page=10#i45472161

ar-jedi

tell me about a scenario that results in a 100% loss of your 401k?

ar-jedi

ps
by the way, you do realize that you can hold cash (equivalent) in your 401k, right?
you can "pull out" of your mutual/bond/index funds *inside* your 401k, and have ZERO market exposure.
the stock market could worst-case-scenario and you would still have the same amount of dollars the next day.

hyper inflation comes to mind on how to lose money while still "earning" 13%.

i love the term "dollars" like it means the same as gold or silver.

More and more 401k plans are droping there cash options and offering bond funds instead. Make of that what you will.

I have changed jobs every 5-7 years for the last 20 years. Each time I roll my 401k over to a personal IRA so I have more control.

401k has way to many restrictions for my tastes. I contribute up to matching and that's it. All other retirement saving is done in other vehicles.

The value of the dollar goes up and down just like the value of gold and silver. Dollars have probably been a bit more stable than gold or silver lately.

As for the market, now is the time to buy bargains.

Diversify

No matter which way you go, don't do so to the absolute preclusion of any other that you deem reasonable, regardless of whether that is a "conventional" investment, or "unconventional"..

I know guys that have KILLED by doing boring ass long term investments and NEVER dumped out no matter what. I have a friend that is a retired school teacher that has kept WalMart stock he inherited decades ago. Millionaire. Living in a piece of shit townhome with a 6 year old used Dodge pickup..

I also know a crazy old man that sunk a TON of money into ammunition about 14 years ago. Talked all this crazy shit about how milsup 7.62x51 and Wolf 7.62x39 was the future. Bought TENS of thousand of dollars worth of south African 51 when it was $0.10 a round and Wolf FMJ 39 when it was $65 a case..

Stuck the shit in a conex in his back yard / junk yard on gorilla racks..

He sold half his stockpile after Obama's 2nd election and the other half after the Sandy Hook shooting a year or two back.....Something like a 400% profit over 11 years? Crazy old man huh..

Both of these guys however, were not diversified really. One rolled the dice on very conservative, and the other on very a-typical investments. Both won, but these are VERY rare examples. The rest of us just need to keep a good stockpile of good stuff at the house, but not forget to max out your 401 within reason....AND NEVER PULL IT OUT EARLY...

When the market takes a dump, I just see it as getting more for each dividend reinvestment dollar!

And I only have about 5-10 years to retirement time.

I just went over my 403B at open enrollment. I had 17.3% growth. I was told who set this up you are too young to be in such a conservitive fund. I will go to the right forum and ask about the funds I was told to spread out my money in. I am staying in and my employer does a decent match. If it crashes I stay in, and if I stay with my job, I will just be buying more at lower cost.

I would not take the hit unless I was 62-65 and worried I would loose half. I am only 43 and do not have much in my account compared to some.

That's it, thank you!

I tend to subscribe to threads and then forget why I was wanting to save them.

go on now.  every 401k plan has a cash-equivalent option made up of treasury bills.

ar-jedi

Folks, investing steadily is just another form of 'timing the market'.



YMMV and in for the squeals....  

Speaking only as one boomer ...

->   I retired 12 years ago at age 54.  At that time, approx 1/2 my assets were in a regular IRA.  

->  At age 59-1/2 I began withdrawing from the IRA at a uniform rate, adjusted for inflation, with the intent being to totally deplete the IRA at age 95 (I should be so lucky).  At that time, the entire IRA was invested in a Vanguard stock market index fund.

->  Today at age 66, I'm living on my pension, dividends on a non-IRA investment (a Vanguard ETF), and the regular IRA withdrawals.  Over the last 12 years, I've spent 8-10% less than this total taxable income, and the excess accumulates in a money market fund

->   Last month, I exchanged ~10% of the IRA's index fund for GLD, a gold bullion ETF, in a non-taxable transfer.

->  Total medical costs this year ... insurance premiums, Medicare premiums, and out-of-pocket medical costs ... will be about $10,000, and I expect them to increase much faster than the CPI rate of inflation.

->   I intend to begin taking Social Security at age 70.

I agree that once the Fed stops printing money ("Quantitative "Easing"), the net selling by boomers will be a significant damper on the market.  QE to infinity or not, either is a reason I bought the gold.

Well, I've got my 401k's and my Roths and other investments fully in the markets.  

SHTF prepping is about PREPARING for the unexpected and unplanned.  We do not know what misfortune may befall us, so we hope for the best while planning for the worst.  We don't want hurricances, etc but we stock generators, fuel, water, food, etc.  I use this same approach for financial preps....

I remember Y2K scares.  I prepped.  Beans, bandaids and bullets.   Some cash too.  But I did not cash out all my 401ks.  Cashing out would be gambling -  betting on an outcome -  instead of preparing for a diversity of possible outcomes.  Leaving money in 401's is kind of like portfolio diversity:  Some resources in bullet, beans and bandaids incase it goes to shit, some resources left in financial preps in case it doesn't.

I remember the tech stock run up.  When I started to hear of people with no clue 'investing' in anything with a "dot com" ending because its was all tech, I withdrew from tech's but remained in stocks.  That market collapsed and I still did okay.  Portfolio theory:  Don't have all your eggs in one basket.

I remember the real estate crash.  Again, idiots paying $500,000 for what everyone knew was a $150,000 house, but not caring because 'some one else will give me more next month".  That was basically banking on finding an idiot with lower intelligence.  Again, I pulled back  on real estate but remained 'In" the remainder of the market.  Portfolio theory again.  remain diversified.

Now, some 15 years later, all those roths and 401K,s and 414h's have done fairly well.  There have been ups and downs, but the accounts are significantly larger.  If there is no financial Armageddon, I don't want to have all my money in a coffee can somewhere earning nothing.  Likewise if there is a SHTF, I don't want all my money in stocks in a 401k.  Use portfolio theory and diversify!  Some money in market, some money in preps...

As the accounts have grown, so have the preps.  Greater incomes generated from investment income have permitted larger amounts of finances to be used for preps.  I;ve been able to purchase 73 acres, expand the food stuffs on hand, eliminate debt, etc.  Again, the over riding principle has been diversification.  You do NOT know what is coming, so spread your 'bets" over all possible options, so you are covered.  

Pulling all funds out of retirement investments is very much like making one large hail mary bet:  You are placing all your resources on a single bet at the craps table.  If the dice come up with your numbers, you win big.  Odds are however, that your crystal ball isn't perfect in its clarity.

This ^^^ buy LOW...

I was buying everything I could financially afford in 2008... it paid off very, very well!!!!

I have considered this as well.

My 401k is for retirement in this society (one that doesn't crash). It is not for survival/prepper purposes.  Cashing it out with a 50% or so hit pretty much overcomes all the benefit from having it.  Trying to time it to gain the maximum advantage right before the SHTF is really pushing it.  It is such a huge reduction that I will never do it, even if the SHTF.  I have slated money to go to both and they are both aleviating a certain kind of risk.

Saying that, there are some things that overlap from both worlds (our current society and SHTF).  

Having an inflationary rate of approx. 10% on average compared to my 2.5% raises for the last 6 years I was becoming poorer in buying power year-over-year.  There was things my wife and I wanted that would benefit us for both the current un-crashed society and the SHTF.  

We decided to NOT cash out the 401k, but to borrow against it (spend future money now and avoid inflation) and purchase those things now.  So, we dumped it into our house with some construction, into gutters and rain barrels (we live in the desert), and to get 5,000 watt solar panels on the roof.  We have water for our garden so we can grow our own food and energy production from the sun.

The somewhat Con thing is we have to pay that money back with interest.  Given that I am negative for the year on 401k growth, the interest on repayment is the only thing that shows growth.

The only other con is that we have to pay it back and don't have that money now.  But on the short-term pro side, it has caused us to really re-vamp our budget and become leaner and live simply.  It has also got us to save for other things (like adoption since we can't have kids).

I have some pretty decent sized rollovers that are sitting in my IRA money market account until after the midterm election.

Paid off one house with mine.  Flipped it and receiving income from that investment.  Going to buy our retirement lot cash next.  Part of retirement is a paid off home.  Rental property or flipping homes with or without owner terms for long term income will help in the end.  Inflated dollars in 20-30 years will never keep up compared with real estate values via rental/sales etc.  

Very close to this.  I moved my wife and my 401k out of the more aggressive funds and into bond funds that typically return 3-5%.  I made the move 3 months ago and had we been in the same funds that had returned 6-15% over the previous few years it would have almost wiped those gains out.  I'll stay in the bond funds until the DOW runs down to 12k, though I think it could still hit the under 10K range.  At that point we'll not only take the risk of moving into more aggressive funds but also contribute more.  For the last year I've been putting 25% into my 401k.  I got a late start and didn't work for a company that offered one until I was 32 years old.  I have a LOT of catching up to do.  

It's amazing what compounding interest does.  Had I started at 21 and put away 20% of my income I may well have 1/4 to 1/2 mil in there.  As it stands I'm not even to 25k  All my 401k will do is supplement my income when I'm too old to work full time and have to scale back to part time.  Unless I win the lotto I don't foresee retirement in my future.

No matter how you decide to invest your 401k, the magic of compounding makes time the critical component. If your employer matches your contributions, you've just doubled your money. After a few years, you'll have enough so that your returns are "contributing" as much to your 401k as you are. It's like having two people contributing to your retirement. Then three, then four.

I'm 57, and my 401k is now ten times my annual salary, and "contributing" to itself far more than I am to it. My only regret is that I didn't start earlier.