Assuming you still work at the company and you're not 59.5 years old, you would have to pay income taxes plus a 10% penalty for withdrawing the funds. If are are 59.5 years of age, the 10% penalty goes away.
In this case, you're probably better off to change your investment mix if you're concerned about a further decline in value. You should be able to invest in CDs or some other lower risk option.
The 401-k is not protected from investment risk, if you have investments that have risk.
If the variables I described in the first paragraph don't apply, shit changes.
In this case, you're probably better off to change your investment mix if you're concerned about a further decline in value. You should be able to invest in CDs or some other lower risk option.
The 401-k is not protected from investment risk, if you have investments that have risk.
If the variables I described in the first paragraph don't apply, shit changes.
Here's the problem with a 401K--many companies who manage these for you (and contribute) don't have much flexibility in terms of reallocation.
Those who've had the flex to reposition should have done so already (months ago) into bond funds, money markets, and even govy securities.
If you're stuck with an inflexible option, then you have to figure out what your time horizon is. Selling low is the worst thing you can do. If you have 5-10 years on the horizon before you'll need the money, then best to let it ride.
Those who've had the flex to reposition should have done so already (months ago) into bond funds, money markets, and even govy securities.
If you're stuck with an inflexible option, then you have to figure out what your time horizon is. Selling low is the worst thing you can do. If you have 5-10 years on the horizon before you'll need the money, then best to let it ride.
thanks for the input guys. i've been at my job for 5 years. i work for a private doctors office and he's not gonna retire for at least another 15 to 20 years so i should be with this 401 k for a while. i feal good about it because over the last year there has never been a decrease on the statements.
is that because it's not invested into anything else?
is that because it's not invested into anything else?
Borrow from your 401K.....
You should probably borrow from it. That is one thing that I have not heard talked about enough in order to protect it. No penalty, you put it in MM or CD, you pay yourself back interest through your pay checks. You can set up many different loan arrangements with your 401k/employer. You could probably make enough in interest by putting it in a MM so that it is a wash. You are still depositing into your 401k, you are just dollar cost averaging by buying at a lower rate now.
If you really think the DOW is gonna keep dropping...BORROW from your 401k NOW. Don't spend it...repeat DON'T SPEND IT. Put it into CDs or MM. This may take more self control around christmas than most people have.
:youmad:richie
You should probably borrow from it. That is one thing that I have not heard talked about enough in order to protect it. No penalty, you put it in MM or CD, you pay yourself back interest through your pay checks. You can set up many different loan arrangements with your 401k/employer. You could probably make enough in interest by putting it in a MM so that it is a wash. You are still depositing into your 401k, you are just dollar cost averaging by buying at a lower rate now.
If you really think the DOW is gonna keep dropping...BORROW from your 401k NOW. Don't spend it...repeat DON'T SPEND IT. Put it into CDs or MM. This may take more self control around christmas than most people have.
:youmad:richie
What part the 401k is yours? Whatever amount is yours roll it over into a annuity (without penalty) with 1st Catholic Slovak Union. 1-800-533-6682 ( no fees/chgs) presently paying 5% (fixed rate flexible) never below 4.5% GTD.......
6yr term, withdraw 10% w/o penalty from FCFU. Still have to pay IRS taxes from anyplace unless your 65 and single
6yr term, withdraw 10% w/o penalty from FCFU. Still have to pay IRS taxes from anyplace unless your 65 and single
Borrowing requires steadfast discipline
http://moneycentral.msn.com/articles/retire/basics/4714.asp
Random, as Tiz mentioned, you should ask for a report of exactly what investments comprise the 401K portfolio. It sounds to me like they have invested it very conservatively, in primarily "guaranteed vehicles", i.e. money funds and cd's. (you said it hasn't gone down when you last looked). If this is the case, then given your time horizon, you are fine. Again, many administrators won't allow for people to shift their allocations within the 401k (Lowe's is a good example).
If you really need the money in case of emergency or hardship, a home equity loan makes more sense. Interest paid on that loan is tax deductible...ask Wullie, he's the pro.
http://moneycentral.msn.com/articles/retire/basics/4714.asp
Random, as Tiz mentioned, you should ask for a report of exactly what investments comprise the 401K portfolio. It sounds to me like they have invested it very conservatively, in primarily "guaranteed vehicles", i.e. money funds and cd's. (you said it hasn't gone down when you last looked). If this is the case, then given your time horizon, you are fine. Again, many administrators won't allow for people to shift their allocations within the 401k (Lowe's is a good example).
If you really need the money in case of emergency or hardship, a home equity loan makes more sense. Interest paid on that loan is tax deductible...ask Wullie, he's the pro.
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