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Old 03-12-2020, 06:50 PM
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Default 401k cash out or hold out?



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Whats your opinion on your 401k with the stock markets tanking over the past few days? Would you cash out before it gets worse or hold on waiting on a potential cure/vaccine/burnout with Covid19? Ive lost 10% on my previous employers 401k but know the penalties are at least 30%. Although cash on hand and paying all my bills and all but 10k on my mortgage if I take it out.

Thoughts?
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Old 03-12-2020, 07:08 PM
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I would let it ride. You would take a beating with the early withdrawl fees that would probably be worse than the loses you will take if you leave it as is. You are about 2-3 weeks late on thinking about selling.

For what it is worth I have left what I had in the market that I did not sell off in early January to put towards a down payment on a property. No way am I selling what I have left right now even though I lost over 25%.
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Old 03-12-2020, 07:42 PM
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You're too late. Selling now would lock in losses. Let it ride.
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Old 03-12-2020, 07:52 PM
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The market is down roughly 25%. Way too late to sell out, all you would do is lock in the loss.
Assuming this is a correction, It is almost time to buy back in.
Lots of great companies have been beaten down, and are now on sale.
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Old 03-12-2020, 09:47 PM
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Increase your contributions if you can while it is down so low. Itíll recover and your be rewarded for the extra contributions when it does.

Definitely donít sell.


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Old 03-12-2020, 09:54 PM
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Im in the same boat, I have lost my ass....
Im just gonna ride out this tidal wave and do my best not to look at the account balance
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Old 03-12-2020, 09:57 PM
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I am about 50% in cash now. I started before this decline. Dumb luck I guess.

On what I am still holding I have determined the market has pulled them down without cause. So I am holding them.

All other things being equal, if you have not cashed out by now, I would not.
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Old 03-12-2020, 10:05 PM
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Hold out. I believe when this is over the stock market is going to skyrocket.
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Old 03-13-2020, 10:02 AM
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I must say this morning I worked on my stock analysis. We have many companies thought to be low risk conservative investments. The per share owner equity is good but the cash flow is poor.
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Old 03-13-2020, 03:55 PM
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The money was put there with the intent of retiring. Withdrawing now will result in huge losses and fees. Unless you need the money RIGHT NOW for an absolute emergency that would catapult your life into disaster, ride it out. Swings are meant and bound to happen. That’s why the money isn’t needed for day to day living.
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Old 03-13-2020, 08:56 PM
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I'm worried that the political talking heads will try to keep things crazy for the next few months. I'm expecting one more big event or report of some kind to drop it down some more. Regardless, I'm may start to buy in April/May, I might miss some big swings up and down, but market will correct itself again.
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Old 03-13-2020, 11:14 PM
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When it dropped 10% I put it all in the money market account. I was past the penalty point so no additional fees. I am waiting for the bottom to get back in. So far I saved myself close to $80-100K in losses.
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Old 03-13-2020, 11:17 PM
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Anyone who tells you "Leave it in through this, you will make the money back" obviously can't do math. I agree, if it will cost you a 30% penalty you may want to ride it out. However, if you are in the situation where there will not be a penalty, getting out before the bottom, then reinvesting on the bounce will always result in more money than "riding it out."
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Old 03-14-2020, 01:23 AM
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Quote:
Originally Posted by 9mmMike View Post
Anyone who tells you "Leave it in through this, you will make the money back" obviously can't do math. I agree, if it will cost you a 30% penalty you may want to ride it out. However, if you are in the situation where there will not be a penalty, getting out before the bottom, then reinvesting on the bounce will always result in more money than "riding it out."
Good luck making that call in this irrational market.
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Old 03-14-2020, 01:38 AM
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Quote:
Originally Posted by Deadmeat99 View Post
Good luck making that call in this irrational market.
Irrational is the word for it. We are either all going to be dead by June or this thing will pass and be forgotten and then we will be faced by a new "crisis".
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Old 03-14-2020, 02:21 AM
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You can move it to money market within your 401k without getting a penalty...

The decision to do so depends on your time frame for use. In a year or two nobody will remember the coronavirus and the markets will recover. If you need your 401k next year, you may want to consider moving some of it to cash


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Old 03-14-2020, 08:07 AM
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it will definitely go back up. I absolutely would not exit the market. If anything buy more while it is down.

You could try to time the market, but dont operate out of fear.
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Old 03-14-2020, 08:36 AM
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I have a couple of 401k accounts. The smaller of the two, I got an email from the investment house that they rebalanced it to minimize losses. The bigger one I rebalanced 6 months ago. I feel my best bet is to let it ride. I will see my agent this week, they will be taking over my larger account as I'm retiring soon.
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Old 03-14-2020, 08:52 AM
Rural Buckeye Guy Rural Buckeye Guy is offline
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I parked mine in cash and bonds last summer, yesterday I moved half back into the mkt. I'll move it back to cash in June with a tidy little profit. The mkt is all human nature and algorythems...i've been relying on that for 20 years now. Each move is at a higher account balance. Nowadays that cash on the side is only 50%, so I'm making $$$ with 25% risked. I 5+ years that will be a monthly check at a paidoff rural homestead.

Dont sell, make money from greed and human nature. Gordon Gekko was right (but terminally greedy). Lets see who wins in November first.
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Old 03-14-2020, 08:56 AM
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Mine is in cash ( been there for a while, moved it to a cash IRA when I quit my previous job) , husband's is 75% low risk, 25 % gamble and he is leaving it alone
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