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View Diary: New IRS report confirms upcoming retirement crisis (95 comments)

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  •  GWB's financial crash wiped out 401Ks (2+ / 0-)
    Recommended by:
    tb mare, gjohnsit

    and folks are understandably reluctant to squirrel away much-needed cash in a stock market that only going to disappear it.

    "The extinction of the human race will come from its inability to EMOTIONALLY comprehend the exponential function." -- Edward Teller

    by lgmcp on Fri Sep 06, 2013 at 03:07:29 PM PDT

    •  If people left the money in the market (2+ / 0-)
      Recommended by:
      WillR, lgmcp

      they would have recovered everything they lost and then some.

      The problem is that many many people either cashed out their 401ks because they needed to keep paying the mortgage, or panicked and pulled everything out of the market and cashed it out. Then they had to pay all the taxes and a 10% penalty for cashing out early. (I did a lot of those tax returns. People who cashed out $20,000 only got maybe $12,000 net of taxes.)

      Anyone who just rode it out and was in a broad-based index fund should be back roughly to where they were in mid-2008.

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