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Don’t Even Think About It – Touching Your 401(k) That Is!
Look, if you’re absolutely stuck right now, then you’ve got to do what’s necessary but, in my opinion, you should avoid 401(k) hardship withdrawals at all costs … and think long and hard before you consider borrowing against your future retirement. With so many people nearing retirement already grossly underfunded [such actions are] going to prove catastrophic down the line. Words: 1043
Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com, provides below further reformatted and edited [..] excerpts from Nilus Mattive’s (http://www.moneyandmarkets.com) original article* for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article reposting to avoid copyright infringement.) Mattive goes on to say:
Fidelity reports that a record number of Americans are making hardship withdrawals from their 401(k) retirement plans (and, worse yet, those borrowing from their plans is also at a 10-year high!). [In addition to mortgaging their future retirement well-being such] withdrawals get assessed an additional 10 percent penalty besides the regular taxes [they must pay on the withdrawal amount as income in the year of withdrawal meaning that a large portion] of their nest egg money gets vaporized before it even goes toward their immediate needs!
PROS and CONS of Borrowing Against Your 401(k)
Fidelity said 45 percent of the people who took a hardship loan last year took ANOTHER ONE this year. On the surface it’s better to take a loan than an outright withdrawal because taxes and penalties aren’t assessed [the one and only PRO) but here are a couple of CONS: (Go here to continue reading this article. No registration is required. It is a direct link.)
*http://www.moneyandmarkets.com/the-perils-of-tapping-a-401k-39976 (Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil.)
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint, in whole or in part, is granted provided full credit is given as per paragraph two above.
Short URL: http://www.veteranstoday.com/?p=47764
Posted by Lorimer Wilson on Sep 4 2010, With 0 Reads, Filed under Living, Personal Finance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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you are insane—401 like all the other fake instruments that are connected with the FAKE FEDERAL RESERVE WILL IMPLODE–GET OUT NOW AS I DID..
That’s Fidelity’s BS. If you are in a bind get the F out and regroup.
Bad advice!
You should withdraw ALL your 401k and invest it in precious metals. That’s the only thing that will save you in the long run. Paper money is just paper and has no real value.
Absolutely bad advise!
Your 401K is tied directly to the wall street gangsters and it is no secret that wall street is as corrupt as a carnival ring toss. Further more it is being propped up by the banksters as well as the federal government and the fed.
When the house of cards comes tumbling down, then see what happens to your 401K when wall street falls to 4000 or less.
Oh yeah, just keep throwing good money after bad and collect your reward.
As for me, I borrowed 9 grand last spring to buy a late model minivan. As soon as I turn 59 1/2, I’m clearing out my 401K and will use it to buy gold and silver. Maybe a couple more guns and ammo.
Wall street has become part of the financial problem, thanks to those fuckers.
We all have seen the articles that are being posted on various financial related websites that claim that the criminals in Washington DC in both the Democrat and the Republican parties are eyeballing those millions of dollars that are squirreled away in the 401k and IRA accounts of American citizens – and, those thieving maggots are trying to cook up some way whereby they can get control of that money, right? Are these articles legitimate, or are they just planted ‘scare stories’ by one party to spook everyone to vote against their opponents? Who knows anymore; this government of ours is so totally infested with liars and criminals and the sleaziest collection of con artists ever assembled at the top of any nation in world history, that only a complete dunce would believe ANYTHING that came out of any of the mouths of these filthy, stinking creeps. But, this sort of article – a plea to ‘hold tight’ and do not move your money – has a very strong odor emanating from it, if you ask me. It reminds me of what these ethnic Wall Street criminals have always told us – stay in for the long haul, don’t worry about ups and downs in the market, just stay put. In the last decade, this ‘advice’ has been exposed for what it was from the beginning – part of the Con. Stay in for the long haul means: we’ve only been able to steal a portion of your life savings, and we want you to hold on long enough for us to be able to steal it ALL. I think the best advice for anyone with a 401k or an IRA is to be extremely vigilant, and to investigate all the options that are available for roll-overs or for sheltering those dollars, create a plan and be ready to execute it at the first sign of any effort by the government to make a move on your money. Be
careful of the tax laws and do not do anything stupid, but be prepared.
Mr. Wilson’s advice comes down to not burning your furniture, or even your house down, to stay warm in the short term, and is right on target. Nationalizing retirement accounts has been widely discussed on sensible financial sites since Obama first took office. The idea, I believe, will be to force every wage earner, farmer, and business owner to “save” 5% of his earnings in a government program which invests the money in Treasurys and agency cybertrash. This money, just like Soc Sec payments, will be spent immediately and a bookkeeping IOU entered on the national accounts. (One of the greatest economic fallacies is that government securities represent a store of wealth.) The interest rate and nominal value of such funds will be irrelevant since all retirement payments coming due will have to be met by further issuance of government toilet paper and from current taxes. The mechanism, therefore, makes these proposed retirement accounts an absolute tax increase, probably on the order of 5% to begin with. At least that’s my take. Any thoughts?