Shoud I cash out my 401k??

kevinbahnz · 03-31-2009, 05:44 PM

What's up guys, like many of the people out there I just got laid off.I have about 10k in the 401k. I've lost about 4k since the summer. I don't need the money right now but I dont want it to just sit there and lose value. Should I just take the money and run? or take a chance and leave it in there and hope that it will turn around? Come to think about it the 335 could use some new shoes.

MadDog · 03-31-2009, 05:46 PM

Quote:

Originally Posted by kevinbahnz

What's up guys, like many of the people out there I just got laid off.I have about 10k in the 401k. I've lost about 4k since the summer. I don't need the money right now but I dont want it to just sit there and lose value. Should I just take the money and run? or take a chance and leave it in there and hope that it will turn around? Come to think about it the 335 could use some new shoes.

You can convert it to an IRA without touching it and paying penalties.

cougfan335 · 03-31-2009, 06:42 PM

Heck no! You transfer that over when you find your next job or as said above convert it to an IRA. Unless you really love everything the gov't spends your money on and would like to donate a bit more to the cause. If possible buy your first house with that cash and you won't have to pay the 10% penalty on top of ordinary taxes, plus you'll get that $8k credit. But rims are sweet and our money might not be worth the paper its printed on soon.

CV335 · 03-31-2009, 07:58 PM

Just wait until you get a new job and rollover the amount. At some point eventually the market will pickup...you already lost some money...gonna lose more to taxes if you cash out. A 2nd alternative is an IRA, but I don't see much benefit...just wait for your next employer's 401k plan.

GreenThree · 03-31-2009, 07:59 PM

How old are you?

kevinbahnz · 03-31-2009, 11:46 PM

32. as you can see I'm not good with money. I'm on a car forum asking for financial advice. lolz I've just started saving for retirement a few years ago. With the economy the way it is makes me want to cash it out and put it in a CD or roll it over to an IRA because someone told me that an IRA was more safer then a 401k. Is it not the same thing?

akack79 · 04-01-2009, 12:27 AM

@ 32 yrs defn don't cash out if you don't need the $$ now.

mpimping · 04-01-2009, 12:28 AM

last resort with all the tax and penalties...

mpimping · 04-01-2009, 12:30 AM

http://en.wikipedia.org/wiki/Arbitrage

number335 · 04-01-2009, 01:37 AM

One of the benefits of an IRA is that you have access to that money in case of emergency. 401ks typically don't allow you to withdraw unless you leave the company or you take an in-service withdrawal like a hardship or age 59 1/2. You can still rollover your current 401k to an IRA and still contribute to a 401k in your next job as long as you don't exceed the contribution limits. My suggestion is to save your money for retirement. You don't want to work for the rest of your life.

Jet335i · 04-01-2009, 09:34 AM

Save it - not worth withdrawing and paying penalties on something stupid like buying rims (gasp!)...not like you need to withdraw it to buy food or stop yourself from being evicted.

NewSong · 04-01-2009, 12:30 PM

Cash out your 401k for new RIMS and you're unemployed?

April Fools?

Because if it's not you need to kick yourself in the balls.

GreenThree · 04-01-2009, 12:39 PM

32. Definately dont cash out. However what you could do if you are looking to stop the bleeding is go into Money Market or gov securites (more conservatiove) OR trasnfer to a fixed annuity which is guaranteed.

The only issue is that if you go into these vehicles, your chances of "coming back" over long term go down considerably since lower risk usually means lower return.

I would revisit your current allocaiton and tweak it if necessary. Sorry to hear about the layoff. good luck

SteveMondragon · 04-01-2009, 05:34 PM

switch to a slow growth investment and let it sit in there. It'll still gain positive but it'll be slow.

I was playing the market for a little while and from Jan 5 - Feb 25, I lost a good $6k

. Switched to a slow growth investment and I'm just letting it go on its own.

kevinbahnz · 04-02-2009, 01:59 AM

thanks for the advice guys, looks like I'll be rolling it over to some 19's. Just kidding.

ejheverest · 04-02-2009, 03:46 PM

Do you want to retire <50 yrs. old? Save up for the rims if you already invest/save >20% of your income.

Neon01 · 04-02-2009, 04:03 PM

Disclaimer: I'm not a financial advisor, and this advice is not a guarantee in any way.

Seems everyone (including my parents) love to buy high and sell low. Look, the market has very likely lost the bulk of what its going to lose, so transferring it all to a low risk asset like bonds or a CD or other product probably isn't the best play. If you really want to play it safe, roll it into a non-taxable IRA where you can pick your investments, take part of it and put it in a money market or something safe, and keep the rest in highly diversified funds (or just the S&P). The biggest difference between a non-taxable IRA and 401(k) is that 401(k)s are more limiting in what you can invest in, IRAs are done through investment firms and they'll generally let you invest in whatever the hell you want, like funds, stocks, futures, whatever. If you hold onto your stock/funds, when the market eventually goes back up - and this could take a very long time, but remember, you're in this for the long haul, its for retirement - you'll be sitting on appreciating assets instead of something that's just going to stagnate.

Please, do NOT take your money and blow it on things you don't NEED. Retirement is there for a reason. SS will be bankrupt when guys like you and I are of age and we need to provide for ourselves.

1cleanm6 · 04-02-2009, 04:14 PM

no.

kyleb350 · 04-02-2009, 04:16 PM

^^^+1. Our company fortunately has a about a dozen different funds to invest in for our 401K. I mixed it up, putting a small portion into Bonds/Stable growth and a larger portion into aggressive and international equity funds so as not to have everything wiped away when the market tanked. Hopefully, I'll be able to detect when the market comes back and transfer the money in my stable funds back into the more aggresive ones to make more of it back.

To answer the OP's question, NOOO

03-31-2009, 05:44 PM	#1
kevinbahnz Captain 159 Rep 709 Posts Drives: 2008 335xi sedan Join Date: Aug 2008 Location: Ma-NC iTrader: (1)	Shoud I cash out my 401k?? What's up guys, like many of the people out there I just got laid off.I have about 10k in the 401k. I've lost about 4k since the summer. I don't need the money right now but I dont want it to just sit there and lose value. Should I just take the money and run? or take a chance and leave it in there and hope that it will turn around? Come to think about it the 335 could use some new shoes. __________________
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03-31-2009, 06:42 PM	#3
cougfan335 First Lieutenant 10 Rep 326 Posts Drives: 335i Coupe MT, Montego/Saddle Join Date: Mar 2007 Location: Reno, NV iTrader: (6)	Heck no! You transfer that over when you find your next job or as said above convert it to an IRA. Unless you really love everything the gov't spends your money on and would like to donate a bit more to the cause. If possible buy your first house with that cash and you won't have to pay the 10% penalty on top of ordinary taxes, plus you'll get that $8k credit. But rims are sweet and our money might not be worth the paper its printed on soon. __________________ e92 335i: Montego, Saddle Brown, Burl Walnut, MT, Sport, Prem, CW, PDC, Rear Shade. Mods: JB4, BMS Dual Intake, Cyba Scoops, Beyern Mesh Chrome 19" wheels, 15% F1 tint, LeatherZ weighted shift knob, body color reflectors, Matte black grill with Montego surround, middle lower grill removed, left and right lower grills painted black.
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03-31-2009, 07:58 PM	#4
CV335 Major 67 Rep 1,209 Posts Drives: '06 MCS Join Date: Oct 2008 Location: TX iTrader: (5)	Just wait until you get a new job and rollover the amount. At some point eventually the market will pickup...you already lost some money...gonna lose more to taxes if you cash out. A 2nd alternative is an IRA, but I don't see much benefit...just wait for your next employer's 401k plan.
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03-31-2009, 07:59 PM	#5
GreenThree Colonel 216 Rep 2,110 Posts Drives: 2011 e90 Join Date: Mar 2008 Location: Boston, MA iTrader: (0)	How old are you? __________________ 2015 335xi \| Mineral Grey Metallic \| Black Dakota Leather \| NAV \| SportLine \| ZPP \| ZDA \| ZCW \| Munich Build Retired: 2008, 2011, 2013 328xi
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03-31-2009, 11:46 PM	#6
kevinbahnz Captain 159 Rep 709 Posts Drives: 2008 335xi sedan Join Date: Aug 2008 Location: Ma-NC iTrader: (1)	32. as you can see I'm not good with money. I'm on a car forum asking for financial advice. lolz I've just started saving for retirement a few years ago. With the economy the way it is makes me want to cash it out and put it in a CD or roll it over to an IRA because someone told me that an IRA was more safer then a 401k. Is it not the same thing? __________________
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04-01-2009, 12:27 AM	#7
akack79 Brigadier General 147 Rep 3,165 Posts Drives: G80 M3 Join Date: Sep 2007 Location: T E X A S iTrader: (18)	@ 32 yrs defn don't cash out if you don't need the $$ now. __________________ 2018 F80 M3 6MT ZCP
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04-01-2009, 12:28 AM	#8
mpimping Banned 867 Rep 336 Posts Drives: gti Join Date: Sep 2006 Location: ny,ny iTrader: (0)	last resort with all the tax and penalties...
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04-01-2009, 12:30 AM	#9
mpimping Banned 867 Rep 336 Posts Drives: gti Join Date: Sep 2006 Location: ny,ny iTrader: (0)	http://en.wikipedia.org/wiki/Arbitrage
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04-01-2009, 01:37 AM	#10
number335 Second Lieutenant 20 Rep 254 Posts Drives: E92 Coupe Join Date: Mar 2008 Location: Orange County, CA iTrader: (0)	One of the benefits of an IRA is that you have access to that money in case of emergency. 401ks typically don't allow you to withdraw unless you leave the company or you take an in-service withdrawal like a hardship or age 59 1/2. You can still rollover your current 401k to an IRA and still contribute to a 401k in your next job as long as you don't exceed the contribution limits. My suggestion is to save your money for retirement. You don't want to work for the rest of your life.
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04-01-2009, 09:34 AM	#11
Jet335i Major 188 Rep 1,083 Posts Drives: '21 F96 X6MC, '11 E92 M3 Join Date: Apr 2008 Location: NJ iTrader: (5)	Save it - not worth withdrawing and paying penalties on something stupid like buying rims (gasp!)...not like you need to withdraw it to buy food or stop yourself from being evicted.
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04-01-2009, 12:30 PM	#12
NewSong Just another jerk in a hat... 119 Rep 1,462 Posts Drives: 2005 Ford Focus Join Date: Oct 2008 Location: Irvine iTrader: (0)	Cash out your 401k for new RIMS and you're unemployed? April Fools? Because if it's not you need to kick yourself in the balls. __________________ He brought me up also out of a horrible pit, out of the miry clay, and set my feet upon a rock, and established my goings. And he hath put a new song in my mouth.
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04-01-2009, 12:39 PM	#13
GreenThree Colonel 216 Rep 2,110 Posts Drives: 2011 e90 Join Date: Mar 2008 Location: Boston, MA iTrader: (0)	32. Definately dont cash out. However what you could do if you are looking to stop the bleeding is go into Money Market or gov securites (more conservatiove) OR trasnfer to a fixed annuity which is guaranteed. The only issue is that if you go into these vehicles, your chances of "coming back" over long term go down considerably since lower risk usually means lower return. I would revisit your current allocaiton and tweak it if necessary. Sorry to hear about the layoff. good luck __________________ 2015 335xi \| Mineral Grey Metallic \| Black Dakota Leather \| NAV \| SportLine \| ZPP \| ZDA \| ZCW \| Munich Build Retired: 2008, 2011, 2013 328xi
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04-01-2009, 05:34 PM	#14
SteveMondragon Seaman 69 Rep 518 Posts Drives: E92 \| I01 \| G30 Join Date: Sep 2006 Location: LA iTrader: (4)	switch to a slow growth investment and let it sit in there. It'll still gain positive but it'll be slow. I was playing the market for a little while and from Jan 5 - Feb 25, I lost a good $6k . Switched to a slow growth investment and I'm just letting it go on its own.
	Appreciate 0 Quote

04-02-2009, 01:59 AM	#15
kevinbahnz Captain 159 Rep 709 Posts Drives: 2008 335xi sedan Join Date: Aug 2008 Location: Ma-NC iTrader: (1)	thanks for the advice guys, looks like I'll be rolling it over to some 19's. Just kidding. __________________
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04-02-2009, 03:46 PM	#16
ejheverest First Lieutenant 29 Rep 395 Posts Drives: E90 SG 330i Join Date: Nov 2006 Location: Mass, NH, Maine, Virginia iTrader: (0)	Do you want to retire <50 yrs. old? Save up for the rims if you already invest/save >20% of your income. __________________ SOLD......E90 SG, ColdWeather Pckg, Sport Pckg, Logic7,H R Sports, Rogue Ikon, M sport shift knob/boot
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04-02-2009, 04:03 PM	#17
Neon01 BMW Nut 50 Rep 452 Posts Drives: 12 X5 35i Join Date: Jun 2007 Location: Bel Air, MD iTrader: (8) Garage List 2004 Honda S2000 [0.00] 2005 BMW M3 - Retired [0.00] 2009 BMW M3 - Retired [0.00]	Disclaimer: I'm not a financial advisor, and this advice is not a guarantee in any way. Seems everyone (including my parents) love to buy high and sell low. Look, the market has very likely lost the bulk of what its going to lose, so transferring it all to a low risk asset like bonds or a CD or other product probably isn't the best play. If you really want to play it safe, roll it into a non-taxable IRA where you can pick your investments, take part of it and put it in a money market or something safe, and keep the rest in highly diversified funds (or just the S&P). The biggest difference between a non-taxable IRA and 401(k) is that 401(k)s are more limiting in what you can invest in, IRAs are done through investment firms and they'll generally let you invest in whatever the hell you want, like funds, stocks, futures, whatever. If you hold onto your stock/funds, when the market eventually goes back up - and this could take a very long time, but remember, you're in this for the long haul, its for retirement - you'll be sitting on appreciating assets instead of something that's just going to stagnate. Please, do NOT take your money and blow it on things you don't NEED. Retirement is there for a reason. SS will be bankrupt when guys like you and I are of age and we need to provide for ourselves. __________________ 12 X5 xDrive35i \| Platinum Gray \| Oyster \| Burl Walnut \| Premium \| Convenience \| 3rd Row \| Apps 13 Audi S4 \| Misano Red \| Black 04 S2000 \| Berlina Black \| Black
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04-02-2009, 04:14 PM	#18
1cleanm6 Brigadier General 464 Rep 3,666 Posts Drives: M5 comp/Range/i3S Join Date: Feb 2008 Location: Earth iTrader: (7)	no.
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04-02-2009, 04:16 PM	#19
kyleb350 Brigadier General 428 Rep 4,709 Posts Drives: '21 X3MC Join Date: Jun 2008 Location: Milwaukee iTrader: (6)	^^^+1. Our company fortunately has a about a dozen different funds to invest in for our 401K. I mixed it up, putting a small portion into Bonds/Stable growth and a larger portion into aggressive and international equity funds so as not to have everything wiped away when the market tanked. Hopefully, I'll be able to detect when the market comes back and transfer the money in my stable funds back into the more aggresive ones to make more of it back. To answer the OP's question, NOOO
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