401K's?

[chipmunk]

I am 29 so I have a LOOOONG time until retirement.

Hahaha. I'm almost 52, and in the very same situation. Maybe at 85 or so...:/

 

[On Our own]

I personally don't like to think I've lost money when the market goes down... you only "loose" the money when you actually sell. Kinda like a house, if you stay in it for 20 years it doesn't matter what the market value does in between because what only matters is when you buy and when you sell.

If people feel they are in stocks / funds / whatever that are dead and are never going to go back up it makes sense to pull it out of those funds and put it into something else, but in my opinion, taking it out right now, paying penalties, and not putting it back into something else that is undervalued right now (other stocks/funds/real estate) is, again in my opinion, like buying high and selling low.

Exactly. When things dive bomb, that's when I try to contribute more than ever. You can buy so many more shares for the same $!

This is true, but it depends on your time frame. WHen I realized that we would have more money if instead of putting our money heavily into DHs 401 we should have been stuffing it under the mattress I was ill. It has, of course climbed largely back to where it was, but this is another false rally, there is no there there.......

We're still working on retirement, but it is focused as much on owning everything free and clear and creating back up plans for our back up plans. I have no faith that SS will be there when we retire. But, I have zero faith in the market at the moment.

 

[Wifezilla]

I agree

 

[abifae]

*

 

[Nifty]

While I'm emotionally scarred because of my parent's being way too frugal, the plus side is that none of my family have (or hopefully won't have to) take care of them.

abifae, you mentioned High School and it reminds me of my pet peeve when I was in HS: We spent years and years in school learning History, Algebra/Calculus, Humanities, etc. but in none of my years in school did we learn the basics of saving money, compounded interest (related to personal savings and investments), retirement planning, etc. I'd gladly exchange having my classmates learning about a few wars, paintings, etc. and learning cursive (how useless) in exchange for some solid budgeting / financial principles.

I'm not saying to dump all those other things... I'm just saying that when I was in school many of the things I learned have had WAY less impact and influence in my life than the basic principles of money management.

Thank goodness I learned that stuff at home... I feel really bad for all those that were in school with me that entered into "real life" without at least a basic foundational knowledge.

 

[Nifty]

I was checking out the news and how the market has been hitting some pretty amazing highs over the past few weeks. This got me to thinking about this thread and how I posted the following about 2 years ago:

Ok, I sorta understand pulling out the money if you really really really need it, but pulling out your money from a 401k ESPECIALLY if it is in stocks / mutual funds right now... isn't that like buying high and selling low?

http://www.sufficientself.com/forum/viewtopic.php?pid=45356#p45356


So, if you sold your stocks back then, you unfortunately were selling low and missed out on some amazing recovery over the past 2 years.

Check out the S&P index (click the 5 year view): http://www.google.com/finance?client=ob&q=INDEXSP:INX

You'll see that we were having this discussion at the very bottom of the market. Of course hindsight is 20/20 but that would have been the absolute best time to buy (and worst time to sell).

 

[meowteri2]

I lost my job last december. So I took some money from my 401k.
I called IRS and they said you can get it penalty free if you are over
55 and lost your job. The 401k people told me if at tax time you end
up in the 25% tax bracket you will still have to pay the 10% penalty.