Replies

You can move money around INSIDE your IRA and 401K — i.e. you can change between mutual funds ( sometimes limited number, but there are always more than one), INCLUDING money market fund. So you don’t have to take it OUT of your IRA or 401K and have to pay the taxes and penalties. Call your IRA custodian and your 401K administrators and find out about all the options INSIDE those accounts.

All that said, it’s hard to say, NOBODY, but nobody knows whether at this point it still makes sense or not to take money out of the market. While things are looking grim, but you don’t know when the market turns up and if and when it does, it may jump up a lot — or not.

A major question is your age — you don’t need to post it here, but if you are say in your thirties, then this may be an opportunity to put more money into those funds, because one would expect that in 20-30 yeaars the market will be much higher. If you are older, but you don’t need that money really soon, you may still leave it alone, and as you put new money into it, again, in 10-20 years it will be worth more, unless Obama will take it all away — first the income from “the rich”, than the wealth, etc.

Teh main point is the first paragraph, that you can move money around inside your IRA or 401K, if you wish, but at this point, think carefully, you already lost about half of it.

Or in your IRA where the last time you put money into ten years ago, you lost your gains, but you are probably right back where you started, i.e. you didn’t actually lost the money you put in initially.

This is not advice, merely information and suggestion that you get more info from your IRA and 401K cutodians.

I guess that the best move for me right now is to move both my 401k and IRA into money market (short term bond) funds to stop the bleeding. (a bit after the horse has left the barn, but I've never known much about investing.)

I'll probably also stop contributing to my 401k and put that money toward my credit card debt. I hate being in debt, especially when the future is so uncertain.

I can start the contributions back up, and put my funds back into higher yield (risk) investments when and if there are clear indications that the economy's fundamentals are good and the market begins growning again.

I'll also invest in precious metals (lead) in case the market does not recover. :)

Thanks for all of your advice, everyone.