alleymaxx
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I am certainly no financial expert but I wouldn't take it out. There are huge tax penalties. Unless you are planning on retiring within the next 5 years you should be fine. The market will recover, I am confident of that. If you were planning on retiring I would maybe visit Dave Ramsey's website (daveramsey.com) and see what he suggests or some other financial adviser but I would definitely not recommend cashing it out. |
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Squat1
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If you are under 59 1/2 there is a 10% penalty on any withdraw plus you will be rsponsible for federal, state, on local taxes. |
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volstommy3000
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What? No, don't do that. Yes, their are penalties to cashing out. You should just ride it out the stock market will rebound. At least wait a few months after the election. |
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Purple
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The penalties are pretty high and then on top of it you have to pay taxes. I would say you would probably end up with less than 50% of what you have in your 401K now. |
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Net Advisor
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Cashing out your 401(k) would be a huge mistake.
1. You would be subject to income tax on the entire amount withdrawn.
2. You would be subject to a 10% IRS penalty on the entire amount withdrawn (in addition to income taxes) if you are under 59 1/2.
3. I would never have all my money in a single fund anyway. I read the Fidelity Freedom Fund 2015, I think these are good marketing fund, but ridiculous funds to invest in. The fund assumes it can project a positive rate of return by a future date. I personalty think Fidelity could get whacked by class action suits for anyone who has a negative return in 2015.
4. I would avoid these kinds of fund and look to Dollar Cost Average each month or bi-monthly (better) in major market indexes such as the S&P 500 and hold for 15+ years.
http://en.wikipedia.org/wiki/Dollar_cost_averaging
5. You could away to go cash, but you will have no tax loss to take.
Fidelity Freedom Fund 2015
http://content.members.fidelity.com/mfl/summary/0,,315792671,00.html
Retirement Mistakes
http://www.investopedia.com/articles/retirement/06/rollovermistakes.asp |
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Mickey Mouse Spears
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You shouldn't do that. There is a temporary downturn in the market, but anybody who knows anything about investing and saving for retirement will tell you that you sell high, buy low. Meanwhile, just turn off the news and ride it out. You should speak with a financial advisor before making any sudden bold moves. This will be over with in a couple of years. |
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Poet_Lleri_el
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Have you bothered to ask the investors you dealt with in getting your 401K. They would be the best people to ask in this case, since they are the people who will impose the penalty. |
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Jerry M
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Generally between Federal/State tax and penalty, you'll lose 1/4th of whatever you withdraw. |
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aelizabethb24
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DO NOT pull your money out of your 401k. you might be loosing some now, but the point of the 401k is that you are in it for the long haul. you will probably spend more on taxes and early withdrawal fees if you closed the account than if you let it ride. |
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Worldly25
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10% penalty plus the income tax. Dumb Dumb move unless you plan to retire within the year. You will never rebuild that retirement fund. Where we you put the money? Under your mattress. You will end up spending it and then have nothing to show. This is what the market does. Goes up and down. Retirement funds are for the long run. In 30 years your 401k will increase. Remember your 401k can buy more shares at lower prices thus increasing the quantity of shares rapidly and when the share price rises you will be in the money |
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SmartA$$
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That would be the worst thing imaginable. who cares what your retirement fund is doing right now? your not retired right now so it doesn't matter.
Buy low, sell high. The market is low right now, what should you do?
Don't act out of fear, act out of logic. If you are more than 5 years from retirement, then you are fine.
Ask yourself this question: On the day you retire, do you think the market will be higher or lower than it is today? if you think the market will be higher on the day you retire than it is today, then don't panic and sell, that would be stupid. |
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Kev
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10% penalty, on top of paying all the taxes.
If you don't want to hold stocks, you should just keep your money in the 401K but instead hold some money market mutual funds in your 401K. Fidelity offers money market funds in its 401K selection.
Hold cash in your 401K plan. A 10% penalty is basically another 10% in the stock market value of your investment. Why would you ask to take an extra 10% loss? |
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nickoname
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Yes |
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Mrs. Mustang
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That's a really hard decision and already there are some really good answers. You hear on the news lately "don't panic, ride it out", but I have the feeling that they're only looking out for their own self interest. My first instinct says to close it out, but penalties can be very severe.
If you do, make sure you have a secure place to store the money where you will not be able to access it easily. Good luck. |
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B-Jo
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Not a good idea. It is very expensive.
https://www.fidelity.com/ |
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Rookie
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There are serious tax implications for cashing out a retirement plan like a 401k, so consider carefully before doing this.
A better option would be to change your asset allocation inside your 401k, and have the money in a place with less risk. You should be receiving regular reports from your retirement account company telling you what your invested in, so call them and explain that your are uncomfortable with the current risk factors of your 401k and would like to move your money to something more conservative.
Also be aware that most companies have limitations on when and how often you can make changes to your 401k, check with your HR department for answers to these questions. I hope that helps. |
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nrg4life200
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There are tax penalties that can be explained by the institution that you have the 401K through.
If you plan to not retire for 10 or so years though, just stick it out. Sure, you have lost money, but right now it's like finding paper towels on sale, stock up for cheap. Then when there isn't a sale anymore, you will come out on top. |
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Gary
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Don't cash out your 401(k). Your doing a disservice to yourself whenever you retire. 401(k) are meant to be long term investments for retirement, not a short term thing. I stick with what you got and stay focus on the long term perspective.
If you cash out, you'll be paying around 35% in penalties and taxes. That's like using a credit card that charges 40% interest. That's just not financial sense. |
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PennyLeeD2
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It's a horrible idea. If you close your 401K, you'll pay income tax on the proceeds (since you paid for it with pre-tax dollars) AND pay a 10% penalty. But why get out completely? You probably have a bond, money fund, or CD option within the plan. It's far better to leave it in and switch to a conservative investment than to take the money out.
If you are still contributing to it, keep that up or even increase it, at least to the company match. (That's free money.) You will be buying very cheaply, so when the market goes back up, whenever that is, you will have a good base. |
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Supermanhole
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Send me some. I'll safely store it for you. |
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curiousaboutit
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Id do it. market crashed again this morning...bailout didnt work. |
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