I’m really not being a smart-aleck here...but what do I do with my 401K money NOW? I realize that I would lose tax money, but is that better than nothing? I could at least pay off my bills and put some of it in my credit union.
The tax ramifications for withdrawing your 401k funds prior to 59 1/2 (with a few exceptions) is steep. Hopefully, some of your 401k investments are in fixed income funds, although even bonds may get hit but nowhere near as bad as stocks can.
Talk to your accountant. He can tell you what you stand to lose on tax (now or in 2013) and penalties compared to the interest you're paying on your bills.
Of course, Obama could eventually eliminate the tax benefits of 401k accounts. He could even reduce your Social Security benefits by the amount you have saved (in the name of fairness). The sky's the limit now that the takers hold a majority.
I’m not a financial expert, so I wouldn’t want to advise you. I will tell you what my thoughts would be. You can take it from there.
I myself might put some of it in precious metals (perhaps some mutual funds with mining stocks), but I would only do that for a small percentage of the funds.
Metals go up, but they can crash in short order too. You’ll only hear about the folks who made money, and will seldom hear of anyone who lost their posterior with them.
The problem with holding on to cash is that it becomes worth less over time. So if you park your funds in a safe account, you may keep the same amount of dollars, but lose lots of value over time.
A few years back, you could buy silver for $12.00 per ounce. Today it’s $32.00 plus. That’s an indication that in a real sense, your dollar is worth that much less.
IMO, if Romney had been elected, the price of silver would have dropped significantly. That’s just my opinion though. Some folks may disagree, and in fact probably do.
My thinking is that he would have done things that would have increased the strength of the dollar. When that is done, the value of things compared to the dollar decline.
Bonds can be good.
Frankly, just about every investment tool has taken a hit over the last five years.
Study stocks, and try to select funds that do well in bad economic times. Some TSAs allow you to pick from a variety of funds.
These are just some hints. As I said before, I’m not a professional or an expert by any means.
When talking to a professional, these can give you some good questions to ask. And I’d like to add, get plenty of advice, and from a number of professionals. Just because someone is a professional, it doesn’t mean they’re good. Form a consensus from their opinions.
Plenty of people have lost money listening to professionals and doing what they say to do. Be careful. Don’t be bashful about asking questions, or disagreeing if you feel inclined to do so. It’s your money to lose.
Almost everyone agrees, you must diversify. Do not put all your funds in one investment package.
If one investment tool fails, you’ll still have the majority of your funds left, if you diversify properly.
Okay, a lot of hot air there. Hope it helps a little.
“I’m really not being a smart-aleck here...but” get out of all financial markets! Get out! Get out! Get out NOW!
We got out over a year ago. The mortage and auto loans have been paid off. Hopefully, the credit cards will be paid off before the end of the year.
We’ve stocked up on lots of food, lots of charcoal (for cooking outside), have started purifying water for long term storage, and have a large storage crate of ammunition and looking to buy more.