I keep up with most of the dumpster fire that is current US news but I’m sorta lost on this one. I contribute to my 401k every week and have a few thousand saved up, as well as stock in the company I work for. Is all of the bad news referring to the stock market crashing? Is this general across the board or more company-specific? I consider myself decently politically educated but not so much economically.
No. Unless you had a ton of money in the account and you were already very close to retirement it just wouldn’t make sense. There are a lot of penalties when you pull an account early. I made a hardship withdrawal back in 2023 to make the down payment on my first home and that made sense for me, but even that type of thing isn’t right for everyone.
Your 401k will rebound eventually, retirement investment requires you to play the long game. If things get bad enough that your 401k is wiped out entirely then it really won’t matter whether or not you pulled the money out because it would likely be worthless in that situation.
It may be wise to change your elections so that the investments are less aggressive/volatile if you have that option, but otherwise try not to think about the total dollar amount as the economy shits the bed. It’s not like a bank account where the dollars equal dollars directly, the value of the investments can change quickly.
Do what this guy said, It’s good advice.
The best time to buy is when everyone else is losing their ass. This is the best time to buy, unless it isnt and the entire market dies.
I remember 2009-2010. It was much worse than this right now. The trick is keeping your job in this market.
This 100%. The other comments addressed the “should I withdraw?” aspect of OP’s question, but this comment deals with “should I stop contributing?”. The answer to the latter is: no.
The mantra in investing has always been “buy low, sell high”. If the stock market is down, continuing your 401k contributions is doing the “buy low” part.
Appreciate it.
If I was the one doing the buying and selling, I would definitely be doing sell low buy high lol.
I was lucky and lost some minor $$ in bitcoin back in the day. Now I just put it all on automatic. Index funds with monthly/biweekly deposits are the best for me and mine.
So, from an investing standpoint, there’s really only two things that can happen. Either the market will recover, and continue steady growth, at which point you’ll definitely be mad if you pulled out completely. The alternative is the collapse of the Western hegemony, at which point you’ll have much bigger problems than your 401k account.
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Tithe to yourself either before or after taxes, the church set 10% for a reason, that is the fluff that you can give before it starts to bother.
Always maximize your matches.
If you are in a lower tax bracket now then you would be when you retire, put it into a roth. If a high bracket today then tomorrow, put it into a traditional.
High risk when you’re younger. You can try to time market ups and downs, but unless you leg back in after you’ve pulled out, you are VERY likely to miss the upswings.
If you have enough to personally invest, either swing for the fences with 0dte or invest in products you use. You probably aren’t wrong.
And remember that that first option win is free. Post your loss porn to wsb.
If you are in a lower tax bracket now then you would be when you retire, put it into a roth. If a high bracket today then tomorrow, put it into a traditional.
I have only just heard this for the first time and it is interesting to me, what is the reasoning for this? I’ve been following the pattern of max out 401k match -> max out roth -> send extra to 401k, but I don’t really follow the intuition behind either strategy.
Reflect on what each tool does. They soak up today dollars to be spent tommorow. Delayed consumption for future benefit assuming your investments are fruitful and inflation doesn’t outpace your gains.
So A) do you want to lock up your money until you are at retirement age? What consumption are you sacrificing today for the benefit tomorrow? What investments are you displacing by these stock only options.
B) when you pull money out of the traditional, it counts as income and will be taxed. Part of retirement is managing your income streams to take out as much as you need/want with as little tax impact as possible. Some retirees get social security and even though they have bank, they don’t pull much from their savings.
Is it a significant impact, probably not. But it is a future risk to delay the tax. Who knows what the tax code will be? I mean, look at how the taxes are proposed to change next year. If you have an income of less than like 360k, your taxes will increase. How many retirees are pulling more than 360k per year? They just got future fucked on their tax deferment.
No. However if you’re the type of person to ask in this question, you should be invested in a target date fund. As part of the way they attempt to hedge for retirement, the include exposure to international funds and bonds.
Kind of a similar-ish question. I recently moved my 401k from an old employer to my personal account. All my money is now sitting uninvested. As much as I’d love to hire someone to look over my accounts, I can’t really justify that at the moment. In the most basic way possible, can anyone suggest specific indexes, stocks, whatever the terminology is that I should or could invest my money into?
There should be a target date fund, do that. It automatically rebalances as you reach your target date. So if you plan to retire in 2050, pick the 2050 fund.
Omg thank you sooo much!! This is exactly the simple and straightforward investment I needed! I also found a few other funds/growth symbols that seemed easy to understand. I’d eventually like to educate myself more on this whole topic, but right now simple is all my brain can handle 🤭
In addition to the target date funds, there are some very basic funds through every broker. Some big ones like SPX and QQQ track directly with the s&p and NASDAQ. Every etf will have a theme (tech, biotech, industrial, energy, etc.) And should have a short description on them. Find something that fits your fancy if you have an industry you really believe in
Yes yes! Thank you! When I was looking into Fidelity’s target funds I found ones labeled as mutual funds that sound super similar to what you described. I looked through the different industries and put some money towards those! I also just read into the difference between the two and will definitely be researching some ETF to invest into.
ETF or 401k personal fund. Don’t let it sit. Hell, even a high interest savings like Vio bank. 4.25-5.25% interest.
In an ordinary recession, you should definitely keep buying because stocks are basically “on sale.”
In this recession caused by sovereign risk (i.e. the government itself fucking up), it’s possible that the market might never come back. If you believe that’s likely-- or if you just want to boycott US investment to protest against the fuckery – you should still keep contributing to your 401k, but invest it in international ex-US funds.
The market goes through boom/bust cycles. This particular bust cycle is being precipitated by shitty political policies. You should be studying the prospectus for the stocks/products you are buying through your 401K. The prospectus tells you what company stocks make up the investment product, and will show you the long term performance. If you’re worried about US markets, you can move your some of your holdings into European/Asian stock products for a bit more diversity. In terms of risk, the stock market is riskier than the bond market, however bonds tend to preserve the purchase value over time rather than generate profit. The higher the risk, the higher the reward. What I have done is take my dividends/profits out of the stock side of the market, and use them to purchase bonds. This way I preserve the profit, and the original investment used to generate the profit stays in the risky part of the market to hopefully keep generating profit. Since the market is taking a big hit right now, now would be the time to buy, while the prices are lower, understanding that you are betting on a recovery which might not happen. Any financial advisor worth their salt would at the very least tell you to diversify your porfolio, as in don’t put all of your eggs in one basket. I would take this a step further to say, you should build up a savings account and not count on something risky like the stock market to be there for you when you retire. The stock market is just gambling.
You just want to log in to your 401k account and take control of where your investments go. You always want to be invested in funds with low expense ratios, like index funds, but you can also pick funds that are invested outside the US. Most of my 403b now is in index funds or low expense ratio funds invested in Europe, Asia, and emerging markets. I just have a bad feeling about the US market for the foreseeable future for some reason
I believe you can let whomever your investor is to invest it in more less aggressive funds or stocks bonds. You might be able to freeze it as well and even the option to invest yourself. But you should call whomever handles it they can probably guide you a bit. But I agree it looks pretty bleek. I’m more concerned with the dollar crashing if we default on the debt. It might all be worthless anyhow.
This is a reason we specifically created social security, its like we have learned absolutely nothing.
