SOCIAL: money trouble!

[Adrian Cotter]

Generally 401ks give you a choice on investments you can make, most
financial advisors I have known have counseled having a spread of
different investments, some in lower return but safer, to high return
but riskier investments. I would look at those options (and the one
Mike mentions) before doing anything else.

If you take the money out of the 401k you pay the taxes, and also pay
a 10% penalty -- which would be losing another 10% in an instant.

Adrian

On Mon, Oct 20, 2008 at 10:39 AM, Amandeep Jawa <deep at deeptrouble.com> wrote:
> Palak -
> One could fill books with everything I don't know about finances (ummmm....
> wait they have they're called "finance books").  But my fervent hope is that
> 401Ks are designed to be valuable if you ignore short term fluctuations in
> value - in the long run they are always worth the investment because over
> decades the stock market is always up.
> I this means I agree with John McCain that the "fundamentals of our economy
> are strong" :-)
> with my head in the sand....
> 'deep
>
>
> On Oct 20, 2008, at 1:25 PM, mike kosim wrote:
>
> 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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> ----------------------------------
>
> Amandeep Jawa
>
> ----------------------------------
>
> deep AT deeptrouble DOT com
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