Withdrawing from 401K..Question

6BangBronk said:
To correct my post, it's none of my business and I have no access to know so I have no idea what the other employees have, just what they say they have??? But I do have access to know that they are well diversified and ranging between in the negative to +4.8% tops right now compared to my 13.1%.

Every 401K specialist to sit in front of me has rolled eyes to go on to the next person.:shaking: I'm a gambling man, what can I say?

But wait... I am diversified. I have a rental house, equipment, a shop with tools and know-how, a full time computer job (as of today anyways), a side lawn business, side moving business, land, antiques, alot of apocalypse items such as 50-60 gallons of fresh spring water at any given minute, HP 78/79 Snowfighter Dana 60's out the ass to sell off to you guys :flipoff2: and a stash of cash in an undisclosed location at my home.

As for a 401K diversification, why would I ever want to settle with any amount of money making 4-5% max in return (and no guarantee at that much) when even real estate averages 7%+??? And then the unavailability to withdraw any lump sums after retirement of my own hard earned money??? And as said, it's 35% and 67 now, what will it be in 20-25 years?

I agree with everything you all have said but there's definitely 2 sides to this... We indeed all have different views and a 401K nipple isn't life's only answer. And quite possibly even a bad mistake??? Will be interesting to keep in touch to compare when the time comes to whatever happens to ALL of us in the future! :beer: None of us have a crystal ball to say that a 401K will amount to anything unless you settle for a low guaranteed interest.

Do keep in mind I had nothing but a bag of clothes and a piece of crap 3 cylinder Chevrolet Sprint that was dying at every stop just 20 years ago when I gambled and came here looking for a job. I have absolutely "0" inheritance. And if it wasn't for withdrawing my 401K I would still be driving the same truck I finally retired after being driven for 15+ years (Ole Duke everybody knows me knows of). And nothing but an empty shop and unstopping cast iron plumbing and changing out the old fuses since we only had 3 120V's and extension cords everywhere. Plus the $300+ electric bills from drafty windows and no insulation.

You gotta know when to hold em. Know when to fold em. Know when to walk away and know when to run. :)
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I agree with a lot of your points. 401k is useless in a SHTF society, and freeze dried food and an underground pod is silly in our current society. My company matches 100% up to 6%, so I put in 6% and enjoy the 100% guaranteed return. The rest I invest in tools, equipment, and fun stuff, or whatever the wife requests. I use my equipment to make money, and often use that money to buy stuff I intend to sell for profit. I only buy stuff I'd like to own or have a need for and would keep if I couldn't sell it. I usually turn a profit of 30% or more. Many times I double my money and only have the item a couple months. The key is to have cash available and be ready to strike on a good deal. Also helps to not be in a position where you HAVE to buy something or are emotionally committed to it, so that you can just walk away if something doesn't feel right or the item is not as described. Then when you go to sell it, be in a position where you don't HAVE to sell it.
 
Gah, architecture firms suck... Lucky to get 3% match anywhere I've ever worked.
 
Yeah, 50% match isn't uncommon.
 
Yeah not uncommon at all, but still isn't great. Better than one company that only matched up to $1500 bucks regardless of anything else.
 
A 3% match is better than the match my employer gives. (Self-employed).

Didn't we have a big discussion on the money subject before you bought the house???

Full disclosure- I am a Dave Ramsey fan. While we still have a credit card (we pay the balance every month), his guide to managing money is straight forward and works. I highly recommend you read the total money makeover book.
 
drkelly said:
Open up a savings account at your bank and name it 'emergency savings account'. Set a certain amount to be transferred from your checking account to the new emergency savings account every month and don't touch it except for emergencies.
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This is a good idea, but even better if you take the money and put it in a roth IRA.You can take out the principle investment without any penalty because the contributions are made with after tax money. I opened one 17 years ago and have contributed the max to it every year since.

As for withdrawing from a standard 401k…don't do it. period.
 
How to handle money like a grown up:

1. Establish a budget. List all your monthly obligations (house bills, any loan payments) and subtract that from your monthly income. Establish an amount you will spend on groceries and gas/commuting. If you have no savings, buckle down and put everything extra into your "emergency savings account" until it equals at least three months of your monthly obligations.

2. Stop going to the mall for fun.

3. Put at least 10% of your monthly income into savings. (I like the Roth IRA idea.)

4. Pay all your bills on time.

5. Establish a line of credit (or even two) with a major carrier (VISA, MC, Discover) that gives you cash back and a decent APR. Use it for things you need to buy (gas, groceries) each month and pay the balance.
 
My employer contributes 5% to my 401k regardless of my contribution. I'm required to contribute ~6% to my local retirement plan & they contribute ~4%. I took out a loan from my 401k a couple years ago & felt it was the best option for us. I still have 22yrs til I can retire & my plan offers a very competitive rate at 4% for up to 60 months.

We recently jumped on the Dave Ramsey bandwagon too - very straight forward & effective approach! ;)
 
don't take out of your 401k unless its an emergency. better to take a loan if needed thru the bank and or credit union. you guys are lucky with the matching. where I work, they don't match jack. I put in 15% of my check. I want to retire one day. :beer:
 
BIGWOODY said:
This is a good idea, but even better if you take the money and put it in a roth IRA.You can take out the principle investment without any penalty because the contributions are made with after tax money. I opened one 17 years ago and have contributed the max to it every year since.

As for withdrawing from a standard 401k…don't do it. period.
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That's good advice. Be careful to watch your income level and contributing to a Roth. You can get hit with a penalty for even a $10 contribution even before reaching the annual max contribution amount we are used to
 
rockcity said:
That's good advice. Be careful to watch your income level and contributing to a Roth. You can get hit with a penalty for even a $10 contribution even before reaching the annual max contribution amount we are used to
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income max is $116k (individual) I doubt that's going to be a concern for someone ready to withdraw from their 401k for home repairs. I own my business and will never pay myself that kind of salary. I prefer to take a small paycheck and rape my company for any other possible expense my accountant says I can get away with. For some the $116k ceiling could be a factor, good to mention.
 
rockcity said:
That's good advice. Be careful to watch your income level and contributing to a Roth. You can get hit with a penalty for even a $10 contribution even before reaching the annual max contribution amount we are used to
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That's where the back-door Roth contributions come into play.

1. Contribute to a traditional Ira as a non deductible contribution.

2. Next day, transfer monies to a Roth and invest.

3. File tax form 8606

4. Profit
 
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