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should i cash out my 401k? i have 10,000

i figured pay the 10% fee. the 20% tax and i have some cash on hand. any one have any success with this? people at work say hold it there becouse im only 33. i figure i can always start the retirement fund down the road.

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Fifty years ago,

you could buy a gallon of gas for a quarter ounce of silver, which coincidentally happened to be a silver quarter. Today, you can still buy a gallon of gas for a quarter ounce of silver. Gold and silver are recession proof. Gold and silver are not getting more expensive, the value of the dollar is going down.

"The Constitution was written not to regulate you in any way, the purpose of the Constitution is to restrain the government." Ron Paul.


This is what I did....

I placed my 401k in a stable fund so I only lost 1% during the last 3 months. I cashed out on the 24th and took me a week to get my bank to give me my money. I bought some silver and gold.

You pay taxes no matter what so that 20% they kept is no problem, fair enough. The 10% penalty doesn't really bother me because I would have lost more than 10% since I took the money out had I kept the money in my normal accounts, plus gold is actually making me some money (figuratively speaking) so the 10% penalty is a wash...I was also unemployed for 3 months so my lower tax liability also offsets the 10%.

Now I have cash to buy dry goods, guns, bullets, etc.

I don't feel scared anymore of what my bank may do...I have peace of mind.

Dollars, Gold and Real Worth.

Here is the problem as I see it. We have a couple of things going on at the same time that makes it hard to see reality.

First what is reality?
The stock market (Dow, S&P 500, individual stocks) are based on the stock price which is supposed to be based on what the free market thinks the company is worth. Right now there are companies (mostly banks) that are a part of the Dow and S&P 500 that are going down the tubes taking those indicies with them. But there are other companies that make real things, provide real services, and are worth something. The question is what are they worth?

Second we are undergoing a depression. A recession is just a nicer word for depression. So as we go into a depression even well run companies with value will see their buisness decline so they will be worth less.

Third the dollar is being destroyed. This causes prices in this country to go up but it also can make our exports cheaper which helps our companies out. But other countries are in trouble too and their currency is being inflated so we might not look that much better to them.

Finally since the dollar is worth less it's harder to see what is really happening to the market. If the market goes down by 20% and at the same time the dollar is dropping then the market worth is really going down more then 20%.

Check out this chart showing the ounces of gold to buy the Dow.


Advice that I read from Harry Browne many years ago has served me well. Here is a post I wrote saying how to invest that will help you preserve your wealth in any situation.


Recession vs Depression.

Best explanation I've ever heard is that in a Recession, your neighbor is out of work and money, and his family is starving.

In a Depression... it's you that is out of work and money, and your family that is starving.

You can contact

Bob Chapman of www.theinternationalforecaster.com. I have heard him many times interviewed. He says you can email him with questions. I'm thinking about emailing him myself. I have $$ in a deferred comp but there is no way to take it out unless I sever with the employer. Good luck.


and after the fed is finished inflating the currency, you can use your $7000 to buy a cheeseburger. Seriously, though, get at least some of your money into physical precious metals.

"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."

I saw an article on CNN business today,

They listed the 3 safe places to invest.

They did not mention gold or silver.


"The Constitution was written not to regulate you in any way, the purpose of the Constitution is to restrain the government." Ron Paul.


And CNN, as we all know contains the absolute BEST investment


I mean they totally predicted everything that we're going through right now and told people to get out of the market last fall and winter, right?


I went as far as...

To move my money to a stable fund. Where most of my coworkers lost HUGE and are very irritable these days, I lost very little (only because I still had a little out in stocks testing to see what would happen before I moved the rest to cash just before the bill signing). I basically saved thousands. I'm pretty reluctant to cash out though because I get matching funds and annual 401k contribution bonuses from the company. I fugure it a win because the influence here caused me to make a really good call when I moved my money to the Stable fund. Then later, if the stock market does show signs of recovery, I can move it back and make a respectable profit.

Good call, I think. With the

Good call, I think. With the matching funds you can not lose. If the company fires you or whatever, you should still have whats there, and maybe the penalty would be gone As long as they are matching funds, even if zero interest you are making a bunch on your money.

im payin all debt first. approx 4000

the rest will be silver. i will have no debt. will never use credit cards without being able to pay the balance in full. im 33 so i will have plenty of years to go to start up my 401k again. freedom!

why don't you borough against it?

You'll have the cash on hand, pay yourself the interest rates and avoid the penalties?


Remember TAXES will be higher in the future.

Whether it is Obama OR McCain that gets in, be assured that taxes on the middle and lower classes will go up.

And it would not surprise me to see them put further restrictions (rationing or controls) or even higher penalties on withdrawals in an attempt to "stop" the bleeding.

At a minimum, you can probably do a rollover into an IRA at a local bank... that way whatever money is there is not tied to some distant market-based mutual fund (MF) operation.

And once you have it in an IRA, you should be able to "cash out" within a matter of hours in a visit to your local bank.

BTW, the "penalty" is not typically withheld when you withdraw the funds -- you pay that with your income tax return next spring. (And the amount of TAX withholding should NOT have to be 20% -- it is actually up to you how much to withhold {against your FUTURE personal tax liability} -- many MF's pressure people that they HAVE to withhold 20% or even the full 30%, regardless of your tax bracket; that's BS and another reason to xfer it to an IRA at a local bank.)

Keep in mind the main reasons you were keeping the money in the 401K were the expected higher returns from the market or MF's (plus, perhaps some matching funds or profit sharing from your employer). If you are fully vested (i.e. 100% of the 401K amount is actually yours to freely withdraw, and their are no "restrictions" on it) then it is up to you how you want to manage it, and where to invest it.

But you bear the "risks" of your choices regardless -- including the risks of doing nothing (which over the past 6 months has meant a 30% or higher loss for most "do-nothing" people -- not much with $10K... but it makes a big deal if someone had say $300K... or thought they had $300K, and are shocked with their next statement to see it cut in half.)

In the interum

Have you moved it to a money market or cash position ?

NCMarc's picture

i cashed mine out

I was worried the company holding the 401k would go under along with my money. (Morgan Stanley)... so I took the hit. I am happy I have my FRNs now. I am buying stuff while the prices are good. (Craigslist has lots of desperate people right now..)

Stock up, it's gonna be a long winter.

A great empire, like a great cake, is most easily diminished at the edges. - Ben Franklin

INVESTMENT principles are not gone

You people & your gold ...GOLD is at a premium now ...BUY low ,SELL high..BASIC


read this!


"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson

I am more concerned about the return of my money than the return on my money. --Mark Twain

nothing for nothing

NOT NO, HE_L NO....JUST check your funds & move them to safe positions...IF they are not there now...

With hyperinflation on the way, cash out and

buy gold and silver and sit on it. Once the dollar is deflated, it never re-inflates.

"The Constitution was written not to regulate you in any way, the purpose of the Constitution is to restrain the government." Ron Paul.


Don't you mean inflated?

Don't you mean inflated? The dollar will have inflation, not deflation. Deflation should make that gold & silver valued at less in terms of USD, but inflation will make gold/silver increase in terms of USD.



dollar cost averaging works, but only in a sound system. however, we are facing a destruction of our very currency, and the loss you will take on your "hit" now, will be much less than the loss of a destroyed currency.

Get Peter Schiff's "Crash Proof". He can take most 401ks and 403Bs and restructure them in the correct funds. He also has good tips and techniques for acclerating your pay down of other debts, including your mortgage. He also recommends buying physical gold and silver.



If I'm not mistaken, EuroPac

If I'm not mistaken, EuroPac requires $50k to start with them.



but you can still buy his book and get started!

how far do you think the

how far do you think the markets are going to go down? how badly is the dollar going to devalue?!

"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson

I am more concerned about the return of my money than the return on my money. --Mark Twain

No one knows...

How far will markets go down?

If you had said a year ago that the Dow would drop below 10,000 people would have said you were insane... Now people are PLAUSIBLY and PUBLICLY beginning to wonder if it will drop to 8,000 or even 6,000, and no one calls them insane anymore.

How badly is the dollar going to devalue?

That depends on how far down the rabbit hole they choose to go before they throw up their hands and let the market correct itself. If they CHOOSE to simply super-inflate then figure 15% to 25% per year; if they hyperinflate, then it (eventually) goes to the equivalent of ZERO, and then the SHTF and hard assets will be the only thing that matters (possession = 10/10ths of the law) and eventually everything will have to be completely revalued in whatever the replacement currency ends up being on the other side of the depression that ensues.

Note that the market may (probably will) "stabilize" at a certain number, WHILE they inflate the currency. So even if the Dow went back up over 10,000 by the end of the year, if they are inflating the currency by 20% annually, then the Dow would need to go UP by 2,000 the first year, and etc each additional year, if it does not go up, then investments would be effectively losing 20% per year in actual value.

Some people have proposed that the Dow and the price of an ounce of Gold will "meet" somewhere in the middle -- say around 5,000 or 6,000.

But all of that is sheer speculation. No one knows because it depends on not only the actions of the people at the Fed, but also hundreds and thousands of bankers around the country, plus the population of the US ...AND the choices, actions, and reactions of millions of people around the world. In short it's a crapshoot.