You had $400K in your 401K?
Posted By: "Holy sh*t, Batman!" - sm on 2009-03-21
In Reply to: We are quite happy with our 401K - sm - It all depends
And how did you lose only 25%? If you had it mostly in bonds, how did you ever get it way up to $400K? After over 30 years doing MT, mine was almost going to reach $100K. Then the stock market tanked, and it's got less than $50K in it now. If the loss continues at the same rate, it'll be at $0 by about Nov. or Dec.
THAT'S why I'm not wasting any more of my hard-earned money in the stock market. Over my lifetime I've contributed more to the retirement fund than it currently has in it. I'd have been better off stuffing it under my mattress all these years.
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401K what to do?
Should DH cash it in or wait it out?
I have no idea about these kinds of things so please speak simple to me.
yes, we can have up to 3 loans with our 401k
and we can barrow no more than half of what is in it. We have 5 years to pay it off. Unless we are using it to buy our primary residence then we have 15 years. What I worry about most with that is making my paycheck too thin. They are already taking out 75 a week for health insurance, 56 for the loan, 20 for a spending account I have, plus 45 to 50 for my contribution to the 401k, 3% of my pay/per pay period.
I had also thought about barrowing against it to pay off my morguage. I owe somewhere between 7000 and 8000 at 6% interest. I went to bankrate.com and did a loan calculator and they estimated 75 per paycheck. I pay 333 a month now. It would be less a month if i did that and that would make me an official home owner, boy that would feel good.
Also the scary thing is, too many people pay off their cc only to run them up again. Once my retirement money is gone, it is gone then what
401K contributions
WIth all this talk about losing money in our 401K did anyone stop making contributions to their 401K? I'm not sure what is the right thing to do. I look at mine and I'm losing money (not as much as some because I am conservative but losing is losing) so I wonder if I should still be even putting money in it. Thoughts?
We are quite happy with our 401K - sm
unlike many others we only lost 25% (about $100K). We are still relatively young, DH is 49, so have time for it to recoup. We have a Fidelity fund with 4 mutual funds and one bond market fund (that money is totally safe). In the last downfall of stocks about 5 or so years ago we lost $30K which recouped pretty quick. Though I don't see our boucing back for a while, we continue to put over $11K into it. Prices are low so in the long run we will do well. I think it all depends on who you have handling your 401K and what funds you have your money in. We are very careful and researched, etc. before opening each fund we have. Started with 2, and now have the 4 mutual funds and the one bond fund. At one point we were earning almost $800 a month in interest in the bond fund, of course that is not the case right now but at least it is still earning us about $300 a month now. It helps that my DHs father lives and breathes the financial markets, has a great broker himself, and passes the info onto us. He has never been wrong so far. it is a great way to make more money but you have got to start when you are 20 or so, the only way to actually have a substantial amount saved by the time you hit 65.
Agree with poster above. DO NOT take $ out of 401K...sm
>> My H wants to take 15k out of his 401k and be done with it. He says we are still young and we can still make it up. >>
I was watching Suze Orman's show recently, and she had someone who wanted to do this. The woman was in her early 30s and wanted to take money out of her 401K to pay off $22,000 in cc debt, just to be rid of it.
Suze said NO, and here's why - taking money out of a 401K now, instead of at retirement, means you'll have to pay penalties (state and federal) plus taxes which will equal about 35%. So in order to end up with $22,000 (to pay off her cc debt), she would actually need to take out about $35,000 from the 401K! So it would cost her $13,000 to pay off that $22,000. Not worth it.
And if that isn't bad enough, look at what you lose by not having that $35,000 in your 401K for the next 30-40 years, earning money for you like it should be. At at average rate of return, that $35,000 would turn into around $353,000! So that's what it's *really* costing you. Tell your husband that and see if he still wants to do it. ;o)
Suze said we need to stop looking at our 401Ks like their our piggy banks/savings accounts. They're for us to live on in *retirement.*
I'm leaving what little I have left in my 401K for now - sm
(what's left wouldn't do me any good, anyway), with the hope that someday it will gain back some of what it lost. THEN, even though I probably still won't have as much as was in it before, I'll most likely take it ALL out of the stock market forever, and invest in something concrete, such as land (which even if it can't be sold for a profit, can be lived-on). The stock market has become so volatile and flaky that it no longer makes any more sense to put your hard-earned retirement money into that than it does to blow it all on Lottery tickets or slot machines.
Not sure what your question is? But my 401K did lose value sm
and it bothers me very much; I lost maybe 25K so it could have been worse. It forced me to diversify and take a closer look at bonds vs stocks, and other investments. Of course I would like to have more than 50K as liquidity and emergency funds, but at one time I was more than 20K in debt. This is a huge improvement in my life and a total change in mindset. It truly has created peace in my heart, to have control over what I spend and not be a tool of the consumer society that says "You are not happy unless you have the biggest, newest, brightest" thinga-mabob that we are selling this week / year / month.
You don't need to buy stuff for self-esteem. Being self sufficient lets me sleep at night.
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