That's what I told my boy a few months ago. There was a bit of silence on the phone (Jeez, the Old Man's gone over the edge). I also told him to get his 401k and IRAs out of stocks and into gold and Treasuries. He hesitated on both, and saw $20,000 go down to $9,000.
Yesterday he told me he cashed out one small IRA and is keeping some cash in the house and is moving his 401K as I told him. He'd better hurry.
As Mark Twain said, "When I was 18, I thought my dad was the dumbest man on earth. When I reached 21, I was AMAZED as the wisdom he had accumulated."
We moved our 401K’s into treasuries when we saw this coming, so we didn’t lose anything. IF the government defaults, oh well...there it goes, but our only choice in our plans, other than paying the penalty and huge tax hit was to move them into a stable fund.
Our son’s 20 and finishing up his master’s degree, so he has savings, but nothing that FDIC wouldn’t cover. But he uses his debit and never carries cash, and I explained to him the need to have emergency cash in case your debit doesn’t work (i.e. bank default, etc.)
The toughest nut to crack was my 84 year old dad. He had his money in mutual funds (all of it, lots of it.) We argued with him for years and finally last year we convinced him to move the funds to a 5 star rated bank, and put it in CDs. The other day I showed him how much he would have lost if he had stayed in those funds and he was dumbfounded. What made us mad was he had a broker that was advising him to let the funds ride...what kind of advice is that for an octogenarian?