SOCIAL: money trouble!

[mike kosim]

As far as I know, the 401K is a tax designation for a block of money.  A 
lot of places who manage your block of tax-free money allow you to take 
it out of stock and leave it in cash inside that account so that it is 
still in the 401K, but he won't have it in stock (he'll have it in cash). 

He should call up the 401K managers to check if he can do this.  
Depending on his work, they may have someone internally who fields these 
kinds of questions or someone that is part of an outside agency that is 
contracted by his work.  Either way, I think there is a solution where 
he can 1. not pay the tax hit AND 2. get it out of the stock he has. 

my amateur opinion only.
mike

 palak joshi wrote:
> dear social,
> so a friend of mine had about 13,000$ in his 401k plan. He got a 
> letter yesterday saying he is on -12.8% and has lost about 3000$. He 
> kind of lost 2000$ in one week. This way he will lose all his money. 
> He cannot NOT INVEST his money in an 401K right? Can anyone tell me if 
> its wise to take the money out, pay the penalty in taxes and put it in 
> a safe savings account? I guess people who have more money can wait 
> for the economy to get better but with small amounts its not worth 
> taking the risk right?
> thank you.
> palak.
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