Posted on 11/05/2008 5:42:24 AM PST by Quickgun
I have my retirement in insurance company annuities. The interest income is (has been ) tax free. What can I do with it to protect it. The additional interest rate it generates there is no longer as important as saving what I have. Do I need to move it into something else? Is there anywhere else I can move it and retain it's tax free interest(till I take it out) status? I fear we are in for a very rough economic ride now. I am only a couple of years away from retirement.
Better to zero our contributions, max out IRA accouts and put the excess into a low-yield savings account... and take the tax hit? Ponder, ponder...
And lose the tax benefit? It hasn't been repealed yet and would have to pass Congress.
How much debt do yo have? How much debt will you be carrying into retirement?
Paying off debt is a way to increase the spending power of whatever income you have, especially in this economy where investment and growth and dividends and interest earnings are all big unknowns.
None of us knows what tomorrow may bring, but we know how much we owe and we can decide to live like no one else, pay it off and get free from having to use our wealth (income form whatever source) to service debt.
I suggests you start watching the Dave Ramsey show, maybe go to a seminar if he holds one locally, check out Financial Peace University classes in your area. They can also refer you to financial planners and advisors in your area.
I think passing congress is a foregone conclusion - and lest we forget, Clinton RAISED our taxes retroactively... there’s nothing to prevent these criminals from doing the same with our savings.
Get a job.
I am very worried about my IRAs and 401(k). Thought I would retire comfortably - Now I think I’ll be getting a government pension instead. Is it possible to convert these into cash available?
The time for American prosperity has offically ended. New wealth will not created-this is wealth preservation time.
I’m wondering what to do with 401K money. Can we withdraw any of it.. even WITH a penalty. It may be worth paying the penalty to get it out of the “financial” system.
I know I’m not puting in any more.
You would get a 10% penalty along with income taxes (which could push you to a higher bracket). The best financial advice is always never do anything rashly or emotionally. If you want to pull out money, then do it in small increments as the market improves.
Take a look at the money in your wallet. Do you see your name on it, or do you see “United States of America”.
Guess who owns it?
It takes years for bad tax policies to affect the economy, that's the lesson from the Great Depression and the 90's. The next bubble might be alternative energy or some other government boondoggle, and there will be profit in it. Unfortunately it will be fleeting profit and essentially malinvestment, but nimble investors will do ok.
start moving some money into Gold, and get some of it off-shore ... the US $ is going to slide again ... before Barack leaves office the Dow and Gold will trade the same price ... not sure where ... maybe 3200
Yeah, move it offshore where you can lose control over it if some despot gets control.
What is your 401K money invested in? Are you still working? Does your employer match (part of) your 401K contributions?
Every 401K plan has different rules, and different investment options. YOU need to read and understand the rules for YOUR plan. Asking for advice here may be emotionally satisfying, but we can’t help you with those details.
401Ks and IRAs are tax shelters. You should always take advantage of tax shelters when they are available, as long as they don’t force you to make bad investment choices.
But how you allocate your investment assets is FAR more important. You can invest in stocks, bonds, and cash inside most 401K plans.
Stocks (and stock-based mutual funds) seem scary to many people right now because they have lost so much value in the last few months. But that is NORMAL. The stock market always goes up and down, sometimes a lot, and sometimes very suddenly. The only question is when.
Things to remember about stocks (whether inside a 401K or outside):
1. If you own stocks, you haven’t lost any money UNLESS you sell them. If you can live on your other income and assets until stocks go back up, you DON’T CARE that stocks are down right now. If your 401K money is in stocks, or stock mutual funds, now might be a very bad time to take your money out. You’d be selling the stocks, most likely at a significant loss.
2. If you are near retirement, you need a good portion of your savings in something besides stocks — usually bonds and cash. Stocks are too volatile for you to depend on them in the short term. If you need money to live on while the stock market is down, you don’t want to be forced to sell stocks at a loss.
3. You may need to live on your retirement savings for a long time - 10, 20 years or more. If all your savings is “safe” in cash, inflation will lower your standard of living a lot. You need some investments with real growth potential in addition to “safe” cash. For most people, that means they should have a portion of their money in stocks and bonds, even in their 60’s, 70’s and beyond.
For most of these investment choices, it doesn’t matter which party controls congress or the white house. It’s ALWAYS foolish to have everything in stocks if you are near retirement. It’s foolish to sell everything and hide cash in a mattress right after a big stock market downturn.
Understand how much money you’ll need to live this year, next year, 5, 10, 20 years from now. Understand your investments, and how they might be expected to meet your goals. Can you — gradually — adjust your investments to improve your chances of having the money you need? Avoid taxes when you can. Avoid selling assets at a loss if you can. Don’t make hasty decisions. Use your brain, not your emotions, to guide you.
Suppose you are working, and your employer will match the first 5% of your 401K contributions. You BETTER put in 5% of your pay to get that employer match. That’s an instant 100% return - you double your money. If you don’t think stocks or bonds are safe, put in in a cash fund inside the 401K. You’ve still doubled your money. Yes, you have to wait until retirement to get your hands on it. But you have to be saving/investing for your retirement somewhere. Why not a 401K? I challenge you to find a better investment, with less risk, than the 100% return on employer-matched 401K contributions.
Even if barack and nancy and harry manage to confiscate HALF of your 401K, you’ll still break even on that part of your investment. And I don’t think they’ll get away with theft on such a grand scale.
Did it years ago and know 100's who have done it also. I do not worry nor do they.
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