Posted on 01/16/2013 3:13:05 PM PST by Kaslin
Seriously, if you are hitting your 401K for cash you either no long believe the stock market will be functioning in the near future... or you have already tapped all other assets and you need the cash to survive. Either way, its somewhat insulting to scold them. Its going to get a lot worse than this. And I'm the optimistic one in the room!
Yuck. Sorry about all the typos. Cat helping.
Why don’t all these people just raise their debt ceilings??
I’m living off of my 401k. Does that make me a bad person?
Don’t give him any ideas
Eat, drink, and be merry, for tomorrow your 401K’s will be confiscated.
I cleaned out one of my (well-funded) IRAs to pay off my house. I also figured that tax rates would never be lower and that the government WILL have to seize retirement accounts in the near future, just to be able to reset the clock on the national debt...which otherwise cannot be sustained.
Which is why I’m watching and thinking about grabbing mine - nothing to do with bills. Of course, I’m sure that when they do it’ll be retroactive.
You shouldn’t tap into your 401K until you really retire. I won’t tap into my TSP (401K equivalent for federal employees/retirees) for quite a long time. I’m letting it grow, which it has done quite well since I retired two years ago.
“Keep you 401! Live in your car!”
I doubt people can understand what you wrote, so I’ll help a bit.
The US debt is GIGANTIC. There is no way that we will ever make progress paying it down. We have half of this country that are pure takers (welfare and everything related), and we even have half of us FReepers as almost-pure takers (i.e., “don’t you dare touch my Social Security”).
So our deficits continue, our debt is TOTALLY unmanageable, but there remains a HUGE pot of gold in retirement accounts - enough to cover the ENTIRE national debt, and them some (probably).
So the feds know this, and they know that they MUST get their hands on the money (as opposed to telling FReepers that the country is really, really, broke). So they TAKE the money and replace it with an annuity (i.e., a monthly payout, like Social Security). That will work for another 5 to 10 years (at which most can retire), but after that, we’re STILL broke and spending like mad, and have no more pots of gold - and then we collapse, and INFLATION finally sets in, and all our money is worth, maybe 25 cents on the dollar (at best, 10 cents in other countries that have been through this) - and the idea of buying a plasma next year goes away - and the dream will be affording some meat so our kids don’t look quite as gaunt...
I haven’t drawn mine down, but I stopped contributing to it when I realized that using plastic for groceries now for something 30 years down the road made no sense. I’m paying down debt, but if I ever am able to contribute again I wouldn’t go any further than the company match.
I have no doubt that one of the fixes for social security is that it will be based on means, and the grasshoppers will be whooping it up after setting aside nothing with money set aside by the ants (while the ants get reduced payments because they’re “rich”). People have to adjust to the current socialism by getting as far off the grid as possible; I know there are limitations as to what can be done, but playing by the rules has turned into a sucker’s game in which the sucker too often watches his/her hard-earned money given to useless garbage.
Contrast the Katrina response to the Sandy response; Sandy happened to “wealthy white people” as far as the government and their media are concerned, and the response has been predictably sluggish.
“How long will it be before Obama signs an executive order to confiscate 401Ks...We already know the Republicans won’t do anything to stop him.”
My first thought when I saw this story was, they might as well spend it because the government WILL take it eventually. Or inflation will eat up.
The best thing you can do now is simplify your life as much as possible, become as self sufficient as you can. Shop second hand via Craig's List and garage sales when prudent. And understand that when they sold you that 401k and told you it was going to be comparable to a traditional company pension, they lied to you.
Before the election we had our 401ks positioned aggressively, heavy in stocks. Now we are 100% tax advantage municipal bonds (State Farm calls it TABs). Was it a smart move? I have no idea. I'm just hoping it makes enough to barely keep up with inflation while offering some small protection from an inevitable catastrophic stock market correction.
But honestly, the future of all 401ks look pretty bleak. I don't know about you, but I was told my money would double every ten years. What a freaking joke. I would have done infinitely better if I had invested a monthly sum into buying a little silver or gold.
Will Obama reach out his evil greedy fingers and scoop up all our 401ks? Not openly. But he may cause the biggest stock market crash in our lifetime. And just when people are the most destroyed, he will step in and offer his hand, like God reaching down to Adam. He will declare that in order to protect your retirement accounts from this kind of disaster ever happening again... all 401ks will be required to contain a high percentage of Government Bonds. And people will THANK him for it. And just like that, our retirement is yet another tool of government control over our lives.
Ah! I get so depressed when I think to much about it!
But if you have any further advice I'd certainly be interested. I try to stay prepared and informed, but honestly most of the time I feel like we are all being drug along helplessly.
I did learn one single positive thing about this financial disaster. We plan on stying in our home long long term. And we have stopped sending extra payments. We no longer want to pay the note early. At least when inflation destroys the value of our savings, the same number of dollar bills will still pay a house note.
Look! I wrote a book! I sure don't blame you if you decide not to read this. :p
I wouldn’t call that a book. Read my home page if you want that (i.e., there’s a reason why FR is slower these days...LOL).
Yea, it was a tough call for me, but I ultimately went the other way and decided to pay off my mortgage. I was paying 5% on it, and not getting a red cent on my savings or one of my IRAs. So screw it, I get 5% by paying down my mortgage. I ended up cashing out a rather large IRA last year after deciding to eat the 10% penalty. I simply don’t want that money available for their taking later and I know that no one, at least here in Texas, can touch my house (as long as I keep up with taxes).
I only wished I had done this earlier, as I probably lost $15k just twiddling my thumbs the past few years.
Gonna check out your home page!
“I’m living off of my 401k. Does that make me a bad person?”
If you are below retirement age, yes. Very bad. Awful, wicked, reprehensible.
It’s 10% PLUS your current tax rate which is probably higher than when you retire.
I find that people pull money out of 401K’s for another reason. They can’t stand the thought of having money and not spending it. Why else would you rather lose 40% of the account rather than make 5%?
“Yes Mr Bob, if you invest with me, I can promise a -40% return. You are guaranteed to lose money with me”
“Well slap my ass and call me Sally. Where do I sign?”
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