401k's are going down with everything else.

[crafty2002]

I just got one heck of a case of the @$$. I am so mad it mad my back stop hurting.
My wife just got her quarterly papers about her 401K. I hadn't paid any attention to them. I didn't have any idea that they could lose money from them. She has been paying in only 4 years but her balance as of 10/01/2008 was $1,975.69 ........
Her balance as of 12/31/2008 is 1,744.09.
I have been preaching to you to get your heads out the sand and all of a sudden I found mine stuck in the bucket and that's better than 200 bucks we lost for me not paying attention....... :-[
I just thought I would post this so everyone realizes that there 401K's can lose money right along with the stock market and that don't look good right now.
She is going to jerk hers out while there is still something to jeck out.
It'll buy the tractor I need along with a few other things. Electric fence, couple of goats, couple of piglets, 100 chickens, fertilizer and seeds, and we'll be in the best shape we have been in since I fell.
I can still drive a tractor if I had one to drive.
I think anyone that has money in a 401-K best take a look at what is happening.
What my wife has isn't a lot, but we can make it work for us. If nothing else just to feed us. We can do that with it and I hope we can sell vegies this year.

It is something to think about.
God Bless.
Dennis

[Watonga_Jim]

Yes, I feel your pain. In 2008, my 401K lost about 25% of it's value by the time the year ended. In my case, I can't cash it out without paying large early withdrawal penalties due to my age (not 59 1/2) and IRS rules. Most accounts offer various investment options with varying risks. I've always been fairly conservative but still lost big time in 2008, like most people. Just have to sit tight and hope things calm down in the next 1-2 years.

Jim

[Bones]

Well if you are at the age to withdraw without a penalty you may want to do it. But if not you will lose even more when you take it out. This time next year things will start going up again (history tells us this).
I am leaving mine alone and the one 401K I have not been able to add to since Dec 2005 is down $7,000 from this time last year. But I only lose if I take it out and I still have 10 years to go before age 59 1/2 . The other option is to have her convert it all over Gov bonds then she will be guaranteed to make some. I bet if you look and see what she has her money it very little is in Gov bonds.

[CarolAnn]

I took mine out several years ago and never contributed again. I took a big tax bite, too, but it was still worth it to me.

The reason? You add up the millions and millions of folks pouring money into their 401k every payday and YET the things loose money. Now, explain that. No one could to my satisfaction; to me, it said that someone somewhere was getting money that I had worked for and it sure wasn't me. And that was while the economy was supposed to be GOOD. *:P

I'm not much on accounting, but dang - even a savings account at .01% interest won't LOOSE money. It just seemed like a slick scam to me. And I would bet that a lot of folks who are watching their retirement funds melt are starting to get that picture.

[Wyobuckaroo]

Years ago, long before 9-11, I worked for a shop that got a new "HR" person. I had worked there a number of year before she came on the scene. Enough things had changed in the years before her that I didn't trust that outfit anyway.

Next person in the door behind her was some gomer selling everyone a "401 K" investment package. Well I got asked why I didn't hurry to sign up like everyone else did. I said I wanted to talk to my accountant before I did anything new.

That wasn't a good enough answer for HR. I talked to my accountant and he said to "keep putting my money where my clout already was" Again that wasn't a good enough answer for HR.

Almost every pay day for several years I was asked why I didn't sign up, or a brochure for the program was with my check. This never stopped until about two weeks before I got laid off.

Right from the off set, I don't think there were two quarters in a row that this program gained.

Found out later this 401 K salesman had followed this HR person around to about every place she ever worked.

Anyone else see a pattern here............... ?

Wyo

[Watonga_Jim]

I'm not a financial expert but without matching contributions from an employer, the 401K accounts would not look so attractive. Because my company contributes .80 for every dollar I put in, I'm ahead in the long run even with the recent collapse in the financial markets. An instant 80% return on your investment makes it a little easier to take some losses during hard times.

[crafty2002]

I'm not a financial expert but without matching contributions from an employer, the 401K accounts would not look so attractive. *Because my company contributes .80 for every dollar I put in, *I'm ahead in the long run even with the recent collapse in the financial markets. *An instant 80% return on your investment makes it a little easier to take some losses during hard times.


You are the first one that made any sense to this mess yet, concidering they put into it also, but I still don't buy it. I forget now, what was it, a $231.60 loss in 90 days.
How much do you loose if you draw it out early.
And can't you draw it out early if it to be used for a business without a loss?
I have 20 acres here that are leased and a tractor, pigs, goats, chickens, fenceing, fertilizer, and seeds would be a buisiness expence I would assume.
We are going to look into it. I don't anything about it but lossing money like that don't make sense to me.
Dennis

[IrishGoddess]

The 401K is a fantastic retirement tool and yes you may some lose money from time to time but in addition to the perk of having an employer match (in most cases) you also have a reduction in your payroll taxes because it is a pretax deduction. The 401k, like a lot of investment options, works on dollar cost averaging and although it is tough to watch your investment balance decrease the lower each stock price goes the more stocks you are able to buy and when they rebound the more money you will make. Anytime you invest in things like a 401k, Roth IRA, Traditional IRA etc. you have to look at it for the long term not as a savings account at a bank. If you have at least ten years to retirement I would leave it alone.

[Wyobuckaroo]

Irish

That is good info on the workings of a 401 K program.

Good advise, if you have the time for it to rebound and or reach its full potential. Yes, it is tax free going in, but I'm pretty sure it is taxable coming out. Ideally your other income will be to a point where income from the account will not create any tax burden more than you would normally have.

That is IF everything goes ideally. Seems it seldom does.

KnowwhatImean
Wyo

[crafty2002]

The way this country is headed I am scared I won't even be able to draw a disalilty check in 10 years. We just found her last statement and she had $2,210.30 in he account. So in 6 months she has lost nearly $500. She pays in every paycheck, her employer pays in and she is still going down hill.
I want to see the one from 3 quarters ago now.
This has got me steaming.
Dennis

[gump]

The way this country is headed I am scared I won't even be able to draw a disalilty check in 10 years. We just found her last statement and she had $2,210.30 in he account. *So in 6 months she has lost nearly $500. She pays in every paycheck, her employer pays in and she is still going down hill.
I want to see the one from 3 quarters ago now.
This has got me steaming.
Dennis


Sounds like you ignored the investment options and tossed the money into the stock market without knowing the risk associated with doing so. 401k plans typically offer a very low risk option - money market fund, t-bills, etc. You should have selected that one if you can't stomach the losses. Buyer beware :-/

One of the downsides of having us manage our own retirement is that people often don't know what they are getting into until it's too late. A lot of people on the brink of retirement probably had WAY too much riding on the stock market and after the big drop, time is not on their side at this point. Scratch retirement off the list of things to do.......

[RangerRick]

In sympothy to all those folks that have lost their shirts in the last several months the 401k has been replaced by the 201K.

Sorry for your loss. In the world of finance one must pay close attention constantly as it's probably your finances you're shooting craps with.

Rick

[farmmilkmama]

This has been interesting to read. Good points on both sides. We have been wondering what to do here, as my husband lost 3K from his 401K in 2008. However, at 31, he's got a lot of time until he could draw without a penality. Thanks for hashing the topic out for us ;) Good points.

[gump]

Well, I am down $12-14k but I was aware of the risks so I can't complain. The investment selections were my doing.

[crafty2002]

I am one of the dumb @$$es that nether thought about retireing. At 49 I got this house, then I leased the 20 acre field behind us and was about to buy a new tractor and then I fell off a scafold trying to get the extra cash to do so.
I was proud of myself. I'm a, was a welder/fabricator, iron worker, carpenter, electician, and block and brick mason. And a few other things.
I could go anywhere at all and get a job until I fell.
Steph never had to work until then. She took care of the house and I took care of all else. Now I don't even know what to tell her about her 401K. She found one statement where she had over $2,700 in it and now she has $1744.09 in it.
I just want everyone to know they HAVE GOT TO PAY ATTENTION TO THE 401K's.
If you don't know what you are doing, learn or suffer.
Dennis

[Dawgus]

I'm so broke now that I can't afford to pay attention ;D.


My old uncle called me the other day flipping out over this, he lost 60k in his accounts that he was holding for an inheritance to my sis and 2 cousins. He's considering cashing them in and giving them the $ now before he loses more.

[ryanmercer]

Taking your money out is a bad idea...

[ryanmercer]

Sounds like you ignored the investment options and tossed the money into the stock market without knowing the risk associated with doing so. *401k plans typically offer a very low risk option - money market fund, t-bills, etc. *You should have selected that one if you can't stomach the losses. *Buyer beware *:-/

One of the downsides of having us manage our own retirement is that people often don't know what they are getting into until it's too late. *A lot of people on the brink of retirement probably had WAY too much riding on the stock market and after the big drop, time is not on their side at this point. *Scratch retirement off the list of things to do.......



exactly, most people just let the money go into the default options in the program... not me. In fact, I have yet to lose a single red cent in my 401k because when I smelled things getting sour, I moved it all out of x and y and put it into z (money markets).

[hvfpaints]

I've been making a few strategic moves from our stable value fund into stocks, trying to catch the lows, running it up a dollar or so , then retreating back to the stable value fund. I won't get rich but it has cut my losses.
An early withdrawl from a 401k carries an automatic 10% penalty due with your federal income tax. It stinks but it was the government's attempt to force you to save until retirement. Instead it has cost a lot of folks I know up to 65% of their savings in this crash.

[Unemployed_trader]

You should find out what kind of investment your 401K was in and all 401k are not taxed yet. The tax penality and other charges may be counter productive if you withdraw it out. Check and see if they can move it to a money market or interest only option that will protect your remaining cash so you don't make decisions on panic and it also gives you time to make sound decisions.

[9er]

Without matching 401ks (most companies are stopping this policy), they are largely ineffective now. You have to pour in a lot of $ and have minimal loss within nearly 40 years of maturity.

Stock market investment in a bailout society is just throwing away your money.