Fiscal Cliff - 401(k) question

[bluehenbillk]

So...I don't see a deal done by January 1.

We will go over the fiscal cliff...at least temporarily.

Wall Street will react extremely negative.

That being said, I'd like to not be a victim of Obama, Boehner & the partisan knuckleheads in the Beltway.

Does it make sense to re-allocate my entire 401(k) into bonds (currently about 85-15 stocks) until the market stabilizes versus taking a 10-20% hit that is sure to come in January??

[danefan]

So...I don't see a deal done by January 1.

We will go over the fiscal cliff...at least temporarily.

Wall Street will react extremely negative.

That being said, I'd like to not be a victim of Obama, Boehner & the partisan knuckleheads in the Beltway.

Does it make sense to re-allocate my entire 401(k) into bonds (currently about 85-15 stocks) until the market stabilizes versus taking a 10-20% hit that is sure to come in January??

If you're going to de-risk just put it in cash and wait and see. Bonds aren't necessarily as safe as they once were.

[Grizalltheway]

So...I don't see a deal done by January 1.

We will go over the fiscal cliff...at least temporarily.

Wall Street will react extremely negative.

That being said, I'd like to not be a victim of Obama, Boehner & the partisan knuckleheads in the Beltway.

Does it make sense to re-allocate my entire 401(k) into bonds (currently about 85-15 stocks) until the market stabilizes versus taking a 10-20% hit that is sure to come in January??

If you're going to de-risk just put it in cash and wait and see. Bonds aren't necessarily as safe as they once were.

Isn't there a ten percent penalty for early withdrawl (hehe)?

[Ibanez]

If you're going to de-risk just put it in cash and wait and see. Bonds aren't necessarily as safe as they once were.

Isn't there a ten percent penalty for early withdrawl (hehe)?

There usually are penalties including a tax. I would leave it alone.

[AZGrizFan]

If you're going to de-risk just put it in cash and wait and see. Bonds aren't necessarily as safe as they once were.

Isn't there a ten percent penalty for early withdrawl (hehe)?

I don't think DF is advocating LIQUIDATING the 401k. Just moving it into the Money Market option...

edit: and I've already done exactly that.

[Ibanez]

All this hysteria will calm down and we'll be fine. Monday morning, the markets will open and all will be well.

Just checked my 401(k), did a little forecasting and looks like i'll be retiring with at least $2.4M. (Of course that is with a 3% raise, 5% return and 16% contribution)

[93henfan]

As my 401(k) equivalent is the TSP, I'll be moving my dough from a target retirement date diversified fund (L2030 Fund) to nonmarketable short-term U.S. Treasury securities (G Fund). I saved a boatload doing this before the 2008 slide.

[Ibanez]

So you fellas are pulling out in anticipation to bad news? When will you re-buy? when it's low and you hope it increases? Is the risk worth the gain?

[AZGrizFan]

So you fellas are pulling out in anticipation to bad news? When will you re-buy? when it's low and you hope it increases? Is the risk worth the gain?

I'll rebuy after there's a deal.

[93henfan]

So you fellas are pulling out in anticipation to bad news? When will you re-buy? when it's low and you hope it increases? Is the risk worth the gain?

It's timing and, of course, it's a gamble. I happened to gamble correctly in 2007, getting out when the DOW was around 14,000 and then getting back in when it was around 7,000. I mentioned it before, but I'll do it again: Even though he is a renowned d-bag, Glenn Beck, of all people, wrote an article that scared the piss out of me and ended up saving me 50% of my retirement fund. I'm glad I listened to that batshit crazy mofo.

But yeah, there's so much uncertainty that it might be good to get out for a few weeks. The best case is the market drops wildly (20%+ drop) and you saved and the worst case is they come to a deal on Dec 31 and you miss out on a 5% gain.

[Grizalltheway]

Isn't there a ten percent penalty for early withdrawl (hehe)?

I don't think DF is advocating LIQUIDATING the 401k. Just moving it into the Money Market option...

edit: and I've already done exactly that.

Alright, that makes more sense. Still kinda new to this grown-up financial mumbo jumbo.

[DSUrocks07]

I'm still young enough to not have to worry about where my 401k is at relative to any "fiscal cliff" scenarios. Were only talking about $5-6k total here. Although I'm not planning on being at my current job for much longer anyways (less than 12 months). So I'm just gonna ride it out regardless of what happens.

Sent from my VM670 using Tapatalk 2

[Col Hogan]

As my 401(k) equivalent is the TSP, I'll be moving my dough from a target retirement date diversified fund (L2030 Fund) to nonmarketable short-term U.S. Treasury securities (G Fund). I saved a boatload doing this before the 2008 slide.

Exactly what I'm doing before the end of the year...

[danefan]

Isn't there a ten percent penalty for early withdrawl (hehe)?

I don't think DF is advocating LIQUIDATING the 401k. Just moving it into the Money Market option...

edit: and I've already done exactly that.

Exactly.

[bluehenbillk]

So you fellas are pulling out in anticipation to bad news? When will you re-buy? when it's low and you hope it increases? Is the risk worth the gain?

You have to wait a minimum of 30 days in my 401K to buy back in.

[danefan]

Might have been a day late......getting killed right now.

[GannonFan]

So you fellas are pulling out in anticipation to bad news? When will you re-buy? when it's low and you hope it increases? Is the risk worth the gain?

You have to wait a minimum of 30 days in my 401K to buy back in.

Really? Just changing from one plan to another within the same 401K?

[slycat]

So are you saying its too late to switch to a money market option? I myself am only a few years into a 401k but still sucks to take a loss. I need to help with understanding how moving hte money back and forth works and all.

[bluehenbillk]

You have to wait a minimum of 30 days in my 401K to buy back in.

Really? Just changing from one plan to another within the same 401K?

No...if you move more than a certain amount out of a fund, I think it's a minimum of $10,000 you can't re-raise your contribution level to that fund in the next 30 days. It's an American Funds thing, not specific to our 401(k) program, I don't know how other investment funds work with that. There has to be some restrictions or else somebody, the bank or the investor, is getting killed with fees.

[bluehenbillk]

Might have been a day late......getting killed right now.

Down less that 1% isn't what I'd call getting killed.....

[danefan]

Might have been a day late......getting killed right now.

Down less that 1% isn't what I'd call getting killed.....

Creaping back up this afternoon which is good news.

[danefan]

So are you saying its too late to switch to a money market option? I myself am only a few years into a 401k but still sucks to take a loss. I need to help with understanding how moving hte money back and forth works and all.

Its never too late.

Moving the money back and forth is really just selecting to put your money in the money market option as opposed to the stocks/bonds/funds its currently invested in.

Most 401k plans allow you to reallocate assets to different asset classes without any material fees. You should double check though.

I have most of my retirement funds in a self-directed plan so I can basically buy and sell whatever I want and can easily move money out of the market and into cash but remainig within the IRA and not subject to Tax.