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I'm no financial guru as my bank account can attest. I've wasted more money than I care to admit. I'm not an "investor" nor do I have any desire to be a part time investor. If I'm willing to put some savings somewhere I would hope that I will get some kind of return on those savings...without me constantly worrying that I could be wiped out in the blink of an eye. Back in the good old days, you know, about 5 years ago I lost about 15k. Why? Because I'm not "savvy". Because I'm too lazy. And because Wall Street decided to fuck everyone when they decided to call in their bets (or the other way around). Or however you want to look at it. All of us "commoners" got fucked while some folks became very rich. Very very rich.

Being able to have money drawn against your paycheck every week seemed like a good idea at the time when we were offered a 401k. Out of sight, out of mind, no worries. Diversify and let it ride. No problem! After all, in the long run I'd get about 8% on my return! Who could argue with that? Who wants a crappy savings account that only offers .00000000001% return? Join the modern era and get rich! Retire and live the good life!

What. A. Crock. Of. Shit.

And when the shit hit the fan? 2k here, 3k there. How can this be happening? Down down down it went until I moved everything to avoid the daily blood bath. That was when I was 44. I can only imagine what the folks went through that were "ready" to retire. Even in the "safer" stuff these folks must have been contemplating suicide. A life time of savings and then? Wiped out or very nearly. A life time of planning erased, not due to their own greed, but to that of others. And those "others"? Well they are doing just fine as it turns out. Somehow, miraculously even, they weathered the storm and today they have even more money in the bank. Golly. Who would of thunk it?

Some very rich folks that pull the strings it turns out. That's who thunk it...but I digress.

So, on to my question of how do I "move" the money in my 401k. Barring me becoming unemployed is there any way I can move what I have without losing upwards of 40% of what is mine? It is supposed to be for MY retirement. I don't care if I can't touch it until those golden years come around, that's not what I want. What I do care about is making it so it can't be touched by those addicted to gambling and making a fast buck off of money I've earned and saved and I'm entitled to. You know, because it's MINE. Kind of like Social Security. How can I take it out of the casino and make it safe? Relatively safe that is...

Trying to google financial information regarding 401k's is a festival or "where and how much" to invest but nothing on the legalities and rights we "may" have regarding them. I just want to move my money as I have no faith in this wonderful thing called a 401k and how it seemingly can be stolen from me without any recourse. Dare I say millions of Americans may be wondering the same thing?

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Comment Preferences

  •  Tip Jar (18+ / 0-)

    Men with religious beliefs have killed more people than any god that they have created...

    by Mislead on Sat Feb 16, 2013 at 12:32:52 AM PST

  •  I don't know what you can do (6+ / 0-)

    Short of leaving your company, going to work someplace else and moving the money in this 401K to another financial house for your retirement.  You may be able to move it but that would only be the money you put into the account, not the money your employer added and then you won't be eligable for matching funds in the new account.

    Don't know who you have your money with but apparently you have it in accounts that are losing money.  I would first talk to the financial firm that's managing your 401K and see what else they have to offer.  Good luck.

    Never be afraid to voice your opinion and fight for it . Corporations aren't people, they're Republicans (Rev Al Sharpton 10/7/2011)

    by Rosalie907 on Sat Feb 16, 2013 at 12:48:32 AM PST

  •  401K's are governed by IRS rules (8+ / 0-)

    The rules for when and how you can move your money can most certainly be found in publications on the website.

    Self-described political "centrists" believe the best policy is halfway between right and wrong. — @RBReich via web

    by BentLiberal on Sat Feb 16, 2013 at 12:49:11 AM PST

  •  Wow. (5+ / 0-)
    Who wants a crappy savings account that only offers .00000000001% return?
    Where can you get that?

    Boehner Just Wants Wife To Listen, Not Come Up With Alternative Debt-Reduction Ideas

    by dov12348 on Sat Feb 16, 2013 at 12:54:59 AM PST

  •  Problem with a 401k (or $*!K) plan (7+ / 0-)

    it is a contract between you, your employer and the IRS.  You agree to save money and your employer agrees to match that savings at a certain percentage in exchange for your selling your soul and first born, I meant for your relinquishing control of your money to the employer (to keep control eschew the matching contributions and start an IRA ) and the IRS agrees taxes on the money is deferred, unless you cash out prematurely.  So there are 3 of you who have a say-so in this account , as Enron employees sorrowfully discovered.
    Here are the nuts and bolts answers:
    If you want to be able to cash out stocks, then buy stocks with after tax dollars so your money is available w/o penalty.  Unless you meet stringent conditions you cannot cash out w/o penalties because the money in the account is not 100% (employer's contribution has not been counted as income to you) yours.  In addition you have deferred taxes.  So to discourage people from cashing out not only are taxes due on the money, in addition to fees the fund administrator can charge, the IRS can demand a penalty.

  •  401K (8+ / 0-)

    The money that you contribute is yours and no one can take it. The money the employer contributes will be yours one you meed the vesting requirements which varies by employer.  Mine was three years.
    I keep my current 401K money in cash. Yeah they pay about zero interest but the other investment choices suck.  
    If you leave the company you can rollover your 401K into a rollover IRA and invest almost anywhere.

    "In Japan, American occupation forces quickly became 50,000 friends. In Iraq, they would quickly become 50,000 terrorist targets. " James Webb, Sep 02

    by ParaHammer on Sat Feb 16, 2013 at 01:05:59 AM PST

  •  I did so by (2+ / 0-)
    Recommended by:
    corvo, Mislead

    reading about what a 401k is. Comparing the security of them to that of bonds and other vehicles. And decided the risk exceed the tax value. Thus never bought them.

    "Til you're so fucking crazy you can't follow their rules" John Lennon - Working Class Hero

    by Horace Boothroyd III on Sat Feb 16, 2013 at 01:07:29 AM PST

  •  If your no longer employed with the company,,, (4+ / 0-)

    that you had the 401K with get out of the plan, roll the money into an IRA where you'll have more control over it. Then wait till your 59 1/2.

    "Remember, Republican economic policies quadrupled the debt before I took office and doubled it after I left. We simply can't afford to double-down on trickle-down." Bill Clinton

    by irate on Sat Feb 16, 2013 at 01:13:06 AM PST

  •  I can help you by giving you information. I can't (22+ / 0-)

    tell you what to do.  You have to decide that for yourself.

    I assume that you are still working for the employer who sponsors the 401k, you are younger than 59 1/2, you are still making payroll contributions, you receive statements, you know your balance, and how much of it is vested (belongs to you) which can be limited to the portion you contributed, plus any appreciation or minus any depreciation, or it can include a part of the amount contributed by your employer or all of the employer contribution.  

    Practically every 401k is Administered by a legitimate financial institution other than your employer.  The Administrator would most likely be a name you'd recognize as a large bank or mutual fund investment company. It keeps track of all the contribution amounts that were deducted from your paychecks and any distribution amounts that were paid from the 401k.  It usually offers a range of investment options too from conservative to speculative. The conservative option might have the word "fixed" in its name and it would pay a rate of interest without risking the principal amount invested.  It would most likely pay under 3% a year.  Little risk, little reward.
    If you choose a big risk there's no guarantee of any reward and as you know you could end up losing.

    What concerns me is that you didn't mention talking to your employer or the administrator.  The employer would most likely refer you to the administrator.  It would be able to tell you with certainty what options you have.  There are some rules.  The money you contributed to the 401k is income that wasn't taxed.  If withdrawals are allowed before age 59 1/2, the IRS will charge a 10% penalty and you will also owe regular income tax on the amount.  You can avoid the penalty and income tax if you transfer the distribution to another retirement account.  Most plans don't allow withdrawals for people who are still working for the employer sponsor and are under age 59 1/2.  Some allow withdrawals of the portion you contributed.  After age
    59 1/2 most plans do allow withdrawals and there is no longer a penalty but normal income tax still applies.

    What also concerns me is that you mention continuing losses.  The stock market has risen steadily since March 2009.  That was the low point resulting from the 2008 economic meltdown.  Since then, the Nasdaq Composite, which is made up of 2000 companies of every type, size, and shape, has doubled.  If you had a standard mix of companies diversified across all industry sectors you could expect a 50% to 100% appreciation since the low of March 2009.  If you didn't remain invested through that huge decline, you locked in the loss without participating in the gain since the comeback.  I don't think that's what you did because it sounds like you've been losing all along for the entire duration since the market crashed.  I don't see how that could be possible.

    One last thing, you should have the option of discontinuing your participation as far as additional contributions.  The payroll deductions that are invested in the plan are voluntary and you can stop them and restart them as you wish.  

    "Democracy is a life; and involves continual struggle." ---'Fighting Bob' LaFollette

    by leftreborn on Sat Feb 16, 2013 at 01:52:55 AM PST

    •  excellent advice (7+ / 0-)
      It usually offers a range of investment options too from conservative to speculative

      You don't need to withdraw money from your 401k, just change the way it is invested.

    •  Great counsel! (4+ / 0-)
      Recommended by:
      Flying Goat, leftreborn, Mislead, BlueZ

      This is excellent, unemotional information that brings reason to a potentially very emotionally charged subject.

      Maybe the diarist's plans offer lousy choices, but I would think/ hope that at the very least it offers a couple index funds that match the market. I looked at the options offered in my plan and the five year returns range from -3.5 to 8%; 1 year returns range from 1.6% (a bond fund) to over 20% (a moderate risk growth fund).

      I have made my share of financial mistakes, but have been lucky enough to stay employed and continue to contribute throughout the downturn and my account has bounced back.

      I would encourage the diarist to speak to the fund administrator about fund choices. You probably don't want to over-manage the account, but you probably don't want to just allow money to continue to be deducted from a paycheck without knowing where it goes.

      •  I can tell you from experience that many of these (6+ / 0-)

        funds are on auto pilot, many companies offer the least expensive and often the poorest funds in a providers investment portfolio.  I got out of the market in my fund just before the downturn but I was still at risk because the MM funds were in danger of  breaking the buck because of a high investment in mortgages.  The problem with most funds is that many plans are not well balanced.  I spent some time on this and discovered that all the funds were invested in the same sectors(tech) and in the same stocks.  There was no real balance whatsoever.  Everything is fine....until it is not.

      •  Agreed, good general advice (5+ / 0-)

        Sometimes it's useful to think in concrete numbers.  For example, I taught at a university for ~5 years in the mid to late 80's.  As with many faculty members, I contributed to TIAA-CREF.  When I left academia, that account was frozen and I haven't touched it since.  How did it play out?  Well let's see, with numbers....

        In those 5 years, I contributed about 4,100 while the school contributed about 6,100 for a total of roughly 10,200.  As I recall, I did a 50:50 split between equities and guaranteed.  The usual advice (which is sound) is that at my age at that time, I should have focused on much more equities and shifted towards guaranteed as I approached retirement, which is still a decade away.

        Right now, the account holds 71,200 with 44,400 in equities and 26,800 in guaranteed.  Most of that equities growth occurred in the 90's as I recall.  If I look at the online records, I can go back to 2005.  At that point the total was about 52,000 with a 32,500/19,500 equities/guaranteed split.

        At the depth of the implosion, the value of the equity account had dropped to slightly under that of the guaranteed account with the combined value bottoming out in the mid 40's during this period.  So from that depth in the mid 40's, it's come back to the low 70's without any intervention.  Had I had everything invested in equities, the value would be in the mid 80's, had I gone with a pure guaranteed return, it would be in the low 50's

        This type of evolution tells you just about everything you need to know...

        1.  Take advantage of compounding and the employer match.  Never leave money on the table if possible.  It's not easy, but for most it's the best option on the table.  Personally, I took portions of the small yearly raises at my current job to first get all of the company match and then max to the IRS limit.  This was a plan that took about 15 years to execute and even then there was pain.
        2.  Understand where you are and don't panic at a market bottom. Yea, the equity part lost half it's value at the base and has been meandering in a flat range since 1999-2000.  If I had been withdrawing my living expenses from that account (or close to that point), I would have been effectively losing money and in financial pain.  If I had transitioned out of stock anticipating continuing withdrawals before the drop, I would have been fine.  However, if I had panicked at the bottom and sold, I would have locked in those losses.
        3.  However, even at the bottom, the value of equity portion was basically equal to that of the guaranteed.  I understand that this was due to the stock market run up in the 80's and 90's giving me that cushion at the bottom.  For someone who had started investing 1999-2000, it would have been a more sobering situation.

        That's what the numbers say on one long term buy-hold case that uses a broad market strategy vs a guaranteed return approach.  At the time, putting that cash away hurt, but that's the long view.

        I agree with some of the comments above.  Some 401k choices are very limited and some are downright poor particularly if the company match is required to be in and remain company stock (it's still above 0 as long as the company remains in business).

        The other thing to pay close attention to are fund management fees.  Over the long haul, they add up.  Minimize those fees where possible.

        Finally, appreciate the difference between saving, investing, and speculating.  

        I was presented with a situation at the market bottom in which the stock price for my employer had dropped by about 90%.  It was a steal at that price and I could have moved my entire 401k into that investment for the ride up.  While the ride up was assured in a rational world, things aren't always rational.  There was a potential for tripping some debt covenants with extreme downside risk for stock holders.  That's speculating, not investing.  I ended up getting the 2x ride back to parity instead of a 10x ride back to big profits and I'm OK with that.

        Was any of this easy?  No, academic salaries at state related schools are very decent, but I wasn't getting rich.  That modest $1k or so a year was a big chuck of discretionary income that I did without early in my career.  When I moved to the private sector, I did not take full advantage of the company match for some time.  Needed cash flows prevented that.  I do understand that there are times when folks can't take advantage of these things.  However, it is to your advantage to find a way if at all possible and plan on a timescale that is measured in years and decades, not months.  I know, easier said than done in many cases.

        •  All good points and useful examples from your own (2+ / 0-)
          Recommended by:
          BentLiberal, Mislead


          "Democracy is a life; and involves continual struggle." ---'Fighting Bob' LaFollette

          by leftreborn on Sat Feb 16, 2013 at 12:54:17 PM PST

          [ Parent ]

          •  My main points... (2+ / 0-)
            Recommended by:
            leftreborn, Mislead

            a.  These are actual numbers not some vague "I got screwed".  Make of them what you will.  They're a useful data point mainly because the fund was frozen and new contributions don't muddy the waters on amounts.  The last active contribution was made in 1989, everything above the net contributed 10,200 is from interest/dividends/etc.

            b.  Like many, I've made plenty of mistakes on the way.  My initial split is one.  I'm not sure of plan rules with respect to reallocating, but I figured I'd wait until the 1999/2000 - ?? secular bear market ends before dealing with that, assuming I can.  If not, that's life.

            c.  The hardest part of all of this - not on that fund, but the 401k with my current employer - was staying invested after I rode down in the market implosion in order to come back on the recovery.  Given my retirement timeline, it wasn't something that had a financial impact, just an emotional one.  However, it did take a bit of discipline to not book the losses by moving to a less volatile option and remain invested in equities.

            d.  The main issue that I see with 401k's is not that they're a scam,  they're not, but that the skills needed to take full advantage of the situation are not ones that the average person possesses.

            •  On Point c., keeping the emotion out of it is the (2+ / 0-)
              Recommended by:
              Mislead, BlueZ

              most common problem that people have.  A rational, analytical approach uses the time line for the investment, or number of years until retirement for a 401k.  If there's a reasonable chance of getting a better price within the amount of time that remains before the invested funds are needed, then it would be wiser to wait rather than sell.

              "Democracy is a life; and involves continual struggle." ---'Fighting Bob' LaFollette

              by leftreborn on Sat Feb 16, 2013 at 02:08:43 PM PST

              [ Parent ]

    •  Good advice, and... (3+ / 0-)
      Recommended by:
      tacklelady, leftreborn, Mislead

      ...There are rules allowing certain withdrawals without penalty (but you gott'a pay the tax) beginning at age 55.

      ...If you roll-over to an IRA, the money must go from administrator to administrator.  Do not have the check made out in your name unless you want to pay the tax and penalty.

      ...There are two investment concepts that are necessary to follow (well, many more than two, including "investigate before you invest," and "don't sign anything you don't understand").  These two are diversification and asset allocation.  Good books have been written on these topics and there isn't room to cover them here.  But, here is the easy way:
      --Vanguard Total Stock Market Index Fund.  It spreads your investment into ownership of almost every good sized company in the U.S., and at very low administrative cost.
      --Vanguard Total Bond Market Index Fund.

      OK, now you have excellent diversification at very low administrative cost.  Asset Allocation is your next hurdle.  Start with 80% stocks and 20% bonds until you're into your 50's (opinions will vary).  Switch to 60/40 when you retire, and over the years switch to 50/50 or even more in bonds.

      It is that easy and cheap.  You won't hit home runs, but enough singles and doubles over time will win the ball game for you.

      There are other ways to make your money from your hard work grow if you know what you're doing.  Real estate can make or break you.  Local small business--maybe.  Buy gold--but that train left the station a few years ago and I missed it.  Burying your money in a Mason jar in the yard won't work.  Bank accounts won't grow.

      I really like the investing books by William J. Bernstein.

      •  IRA is a good way to do it (1+ / 0-)
        Recommended by:

        The tax laws are so complicated, that many people mess themselves up.

        The main reason to have the money go from Administrator to Administrator is to avoid paying taxes on the withdrawl.  IF you have the check made out to yourself, the institution paying you is required to withhold taxes (usually 20%).  When you then put the money into the IRA yourself, you have to return the 20% out of your own cash.  By not having the check made out to you, or even mailed to you, no money is withheld.

        Another good reason to move from 401k to IRA is for funding a child's college tuition.  We always planned to use the 401k to pay for kids' college, but didn't understand all the rules.  We knew we'd have to pay the penalty and taxes every year for the money we took out.  However, if money from an IRA is used to fund tuition, there is no penalty, only tax.

        So, we moved cash from the 401k to the IRA.  No penalty.

        Everyone with any type of retirement investment should begin to familiarize themselves with investment education.  Get a "Dummies" book, take a free class (our city offers one), watch financial shows, something.  People allowed losses to hit their retirement accounts that they could have avoided with just a little bit of oversight.  We need to stop that from happening to them again.

        If you want to know the real answer: Just ask a Mom.

        by tacklelady on Sat Feb 16, 2013 at 08:29:44 AM PST

        [ Parent ]

  •  A 401K is just an investment account (7+ / 0-)

    for retirement.  The funds deposited there are not taxed when you put them in. They are taxed when you draw them out  There's also a tax penalty for withdrawing funds before you reach retirement age -- you can borrow against them without penalty and pay yourself the interest, but you can't withdraw them early without penalty.

    The funds in your 401K can be invested in stocks or bonds, or mutual funds, or in an insured money market account, or any combination thereof.  To find out how to manage them you need to know who your deposits are with.  (It's on the statement you get that told you you lost money.)

    They probably have a website, where you log in and from there can read about the investment types available and move money around.  

    Go online and look for the company who manages your 401K and see if between what they have on their website and what is on your statement you can figure out how to register online  on their system. If they are a smaller outfit that doesn't use the web this way there will be a form to fill out and send in that you can find online, or can get from your company's HR department.

    Moving the invested funds around is easy. They might offer a LifePlan Fund that balances your portfolio for you based on the number of years you have to go before retirement. Or you could just move it all into a Money Market fund that's insured.

    If you're still actively participating in your employer's 401K Plan you also need to designate where your new contributions are to be placed.  If you don't designate, whatever the default is will govern where the funds go, and it sounds like you don't like the performance of the default fund. Doing this is easy too -- it just means filling out and submitting another form.

  •  My take on 401ks (11+ / 0-)

    I'm sure you have had bad experience with the 401k program and that's why you absolutely want to get out. I understand it absolutely.
    My personal experience with 401k has been mostly positive and I can't imagine getting out of it anytime soon. I have had a 401k in almost 20 years that I have been in corporate America and my employer offered until recently a match up to 3%. My 401k administrator (Fidelity) also offered a really wide variety of options ranging from very conservative to aggressive investments. I was lucky enough to keep my investment mostly in sector funds such as International (Latin America, Asia Pacific) as well as Energy, Utilities. Those have performed well.

    I understand the skepticism about 401ks not working well for the small investors. But when I think about the alternatives, I still believe 401ks beat most other investment options. IRAs give you a little more leverage, but unless you are savvy, they also offer lots of pitfalls.
    To get back to your original question: Simply make a call to your company's HR department or your plan Administrator and they will tell you everything in details.

    •  Yes my 401K has been wonderful (5+ / 0-)
      Recommended by:
      Pluto, MKSinSA, Flying Goat, Mislead, BlueZ

      It's not worth quite what it was in 2006 yet, but almost.  And I'm getting a nice return now, so if this keeps up it will recover and then some before I retire.  (I have 14 years to go.)

      It helped me buy my house last year because I did a 401K loan to pay the down payment and moving costs. And it's been  a resource other times when emergencies overwhelmed my savings. For that alone it'd be worth it.

      •  Excellent point ... (2+ / 0-)
        Recommended by:
        Mislead, BlueZ

        I did the same thing. I borrowed money from my 401k for some unexpected expenses and paid myself back without it showing on my credit report. Another great feature of 401ks.

      •  And if it doesn't keep up, but pulls another (2+ / 0-)
        Recommended by:
        corvo, Mislead

        Nosedive like several years ago, right at the timoe you are ready to retire...?

        I think that is what has the diarist concerned.

        "We refuse to fight in a war started by men who refused to fight in a war." -freewayblogger

        by Bisbonian on Sat Feb 16, 2013 at 08:13:24 AM PST

        [ Parent ]

        •  Why would anyone be in the stock market (2+ / 0-)
          Recommended by:
          Mislead, BlueZ

          When they are ready to retire? Doesn't make sense to me.
          I'm still in my early 40s and can stomach another stock market crash. But as soon as I hit 50, it is goodbye stocks for me.
          Financial Education is what's needed. People need to understand those risks.

          •  While the general sentiment is correct... (1+ / 0-)
            Recommended by:

            I'd probably add a few qualifiers....

            a.  Exiting at 50 seems early to me.  Stay in equities later if we're clearly in a secular bull market, harder call if it's a secular bear market.
            b.  You also have more flexibility with respect to timing if you have other income sources that allow you to hold a position in a down market.
            c.  Really take time to understand your personal risk tolerance.

            Agree - most of this starts with Financial education.

    •  The one structural issue with 401k's... (2+ / 0-)
      Recommended by:
      Flying Goat, Mislead

      versus defined benefit pensions is that your risk pool has one member, you.  There is no time averaging, no population averaging.  This is a major structural issue which doesn't have a fix (the fix is that everyone tries to save for worst case if they are able - maybe that's great society wide, I don't know, I'm not an economist)

      The upside, it's portable, so job movement over a career for whatever reason is not a financial killer in retirement.

      •  I'd argue a partial fix, though far from perfect, (2+ / 0-)
        Recommended by:
        bepanda, Mislead

        is to invest in total stock market index funds.  Not as ideal as fixed benefit pensions, but your risk pool is basically the entire stock market (Or, more accurately, a large enough subset of it that it's essentially the entire stock market).

        My 401k has a number of Vanguard's institutional index funds (Institutional means lower administration fees than what individual investors can get, though Vanguard is known for low fees in general), and that's where I put much of my money.

        •  I'm talking about the pool you need to fund.... (2+ / 0-)
          Recommended by:
          Flying Goat, Mislead

          not how you fund the pool.  You're right, for most of us, index funds with low management fees is a good path.

          Back to my point....

          For a large corporation with a large workforce, you'll have a large pool of pensioners.  Actuarially, you'll have a distribution of outcomes which you can track with reasonable precision.  Sure, it evolves over time, but you'll have a large enough pool to understand the mean years in retirement and the distribution around that mean.  The funding accrued for those who have early deaths basically covers the other side of the distribution if you will.

          In a 401k world, each of those retirees acts as an individual population of 1.  As a single person, you really can't target a mean for funding.  If you have an early death, your heirs inherit the estate, but what happens if you have longevity?  You really need to fund something greater than the average need since there is no mechanism (more accurately, there's no population) to redistribute within the population to make up the shortfall if you happen to be blessed with longevity beyond the mean.

          •  Sorry, I misread your comment... (2+ / 0-)
            Recommended by:
            corvo, Mislead

            Was thinking risk pooling with respect to possible investment, not life expectancy / risk of disability / etc.  I agree completely that 401k's don't do that at all, and can't do that by design.

            •  No problem... (4+ / 0-)
              Recommended by:
              corvo, Flying Goat, bepanda, Mislead

              in some respects you can view SS as a means to make sure some sort of cushion exists.

              Of course, as soon as one understands this renders, any strategy which involves movement of SS to a privately invested individually directed fund should be immediately and transparently viewed as insane.

              •  Except by Republicans ... (1+ / 0-)
                Recommended by:

                They want to please their friends at Goldman Sachs and CITI and JP Morgan.

                Social Security should NEVER EVER EVER be privatized or vouchered (Paul Ryan).

                •  I don't think the driver is to please Goldman etc. (1+ / 0-)
                  Recommended by:

                  to tell you the truth.

                  It's a government directed program that touches everyone and generally does so to their benefit.  It's goes against their ideological meme in a very fundamental way.

                  •  I disagree with you on this. (2+ / 0-)
                    Recommended by:
                    Mislead, BlueZ

                    I have come to the conviction that Republicans don't hate Government. But they hate a Government that tries to level the playing field for everyone in America. They hate a government that prevent their friends on Wallstreet from stealing from Joe Mainstreet. They hate a government that opens the eyes of many.

                    Watch Republicans extend the government to please their base: Impose their religious views, extend Military, spend on Defense, Guantanamo, attack our personal Liberties, ... etc. Republicans don't have a problem with that type of BIG government.
                    I'm convinced Goldman and JP Morgan and CITI are salivating at the day, when SS money will be forced to go through their hands.  We already complaining about too big to fail Financial Institutions... imagine if GS was asked to manage a portion of the SS money of Americans. How big will they get? That thought scares the hell out of me.

  •  401K (4+ / 0-)
    Recommended by:
    johnny wurster, MKSinSA, corvo, Mislead

    Begins with F
    And ends with K

    You can't access those funds, except under emergency need conditions with some help from your employer, but you can roll it over to another tax exempt vehicle like an IRA.

    Problem is, you will roll it over from a portfolio that your employer contributes to, to a portfolio that YOU have to manage.

    I have both, my company 401k and a couple of mutual fund accounts that I contribute to from monthly savings.

    My personal accounts perform similarly to my 401k, which is a function of the market and the fund manager. Market goes up, I make money. Market goes down I lose money.

    It's a long term commitment. I don't get mired down in the day to day performance. Over the last 10 years I've been with the same broker, I lost a ton in 2008, got even in 2011, and today I'm up about 17% from initial funding.

    I've got 15 more years to work before I start living on my savings, so I'm trying to make sure I never, ever, ever have to say: "Welcome to Walmart". I don't shop there, I sure as hell don't want to work there.

    We've been spelling it wrong all these years. It's actually: PRO-GOP-ANDA

    by Patriot4peace on Sat Feb 16, 2013 at 03:00:04 AM PST

  •  I have a dislike of dealing with investements too (2+ / 0-)
    Recommended by:
    Flying Goat, Mislead

    luckily mine were allocated (I'd paid someone prior) when
    the crash hit. I did not "loose" as much as apparently some people did. Maybe 1/4 or 1/3 of it's value. I stayed in because people were saying not to get out and take the hit that it'd come back. ANd it' grew back up, so to speak, within a few years. Now it's above what it was before the crash.

    I'm sure you got better advice than I can give, above. One thing you can do is pay someone to be sure your money is allocated/distributed properly every few yrs or have a trusted friend who likes that stuff--so many do--deal with it.
    Some investment companies have one time specials--Schwabb used to--where on time advice (and action) is free or discounted. I figured out that I would NEVER get around to dealing with learning what I needed to to be able to allocate it properly every yr myself...I'd just not do it. So I bite the bullet and pay someone even though I'm now not working/disabled. It's paid as a percentage of my account.

    I put off dealing with my inventments far too long. You are supposed to see if your money is allocated correctly to the current conditions every year and it's been years for me. I do get your distaste and lack of interest. I have the same. My parents died and I sold their home so have a fraction of that as a nest egg. It forced me to face dealing with it because I couldn't abide by me loosing their money they left me knowing how much it meant to them to pay off that house (they were first homeowners in both their families, and my parents were working class pretty much-draftsman and clerk/typist).

    You have to make sure the fee is worth the amt of money you have. I figure for me it is because if I don't pay someone I won't deal with it myself and will likely loose more than the fee of paying someone else to do it.

  •  How the hell do you get out of a 401(k)? (3+ / 0-)
    Recommended by:
    Bisbonian, corvo, Mislead

    You don't!



    The Government

    Boehner Just Wants Wife To Listen, Not Come Up With Alternative Debt-Reduction Ideas

    by dov12348 on Sat Feb 16, 2013 at 03:38:36 AM PST

  •  Well, you need to do something! (6+ / 0-)

    You've gotten some good advice in the comments, but as I'm sure you've figured out, you're not going to be able to physically move the money without paying about 40% in taxes and penalties. Trust me, you don't want to do that.
    Look around in the options offered by the company that manages your 401K and see what options you have to invest in. Look for something conservative, that gives you a low return but is in safer investments like bonds and money market funds.
    I'm 56, so I keep about half of mine in a "conservative" package, but the other half I keep in the stock market. I used to hate trying to keep up with all that stuff too, but considering it's my retirement, I decided being lazy and uninformed was not an option.

    “We are not a nation that says ‘don’t ask, don’t tell.’ We are a nation that says ‘out of many, we are one.’” -Barack Obama

    by skohayes on Sat Feb 16, 2013 at 04:14:43 AM PST

  •  I have a 403b (2+ / 0-)
    Recommended by:
    tcdup, Mislead

    instead of an 401k as I am a government employee.  In our case there are a wide range of investment options and if you are risk averse you could move all of your money into bonds for example.  I would your 401K would have a similar option.

    "To see both sides of a quarrel, is to judge without hate or alarm" - Richard Thompson

    by matching mole on Sat Feb 16, 2013 at 04:44:45 AM PST

  •  Since there is no info in the diary (2+ / 0-)
    Recommended by:
    ItsSimpleSimon, Mislead

    It's hard to give you any advice.
    Here are the basics.

    1. On tuesday call the HR at your company. Ask, "Who administers our 401k? Can I have their phone number please?"

    2. Call up the administrator.

    3. If you no longer work at the company tell them you want to roll your 401k into an IRA.  If you do that there is a chance you might lose part of the employer's contribution - that depends on their vesting schedule. You will also need to open an IRA account for the 401k to go into. You can do that at any bank/brokerage/credit union.
    If you roll over into a Roth IRA you will pay a tax penalty now but it will be tax free when you begin withdrawing funds at age 59.5. If you roll over into a traditional IRA you will not pay taxes now but will pay them later. You cannot withdraw the money as cash without penalty and only in extreme circumstances, IIRC.

    4. Buy and hold. If you had never sold when the market was going down you likely would have made up all of your losses and then some. Look into a target dated fund.

    If you aren't outraged, you are an idiot

    by indefinitelee on Sat Feb 16, 2013 at 05:39:05 AM PST

  •  DISCLOSURE: I used to work for TIAA-CREF, (1+ / 0-)
    Recommended by:

    am out on disability, am not licensed to give financial advice, and have no experience in consumer financial products.


    You should be able to roll-over without penalty as you are not directly being distributed the funds.

    Investigate investment companies , talk to, or meet with one of their specialists to see what products might best suit your needs.

    Like I said, I am a non-active employee with a certain bias, but I have done very well with TIAA through the years.

    I see a very beautiful planet that seems very inviting and peaceful. Unfortunately, it is not.…We're better than this. We must do better. Cmdr Scott Kelley

    by wretchedhive on Sat Feb 16, 2013 at 05:41:25 AM PST

  •  Most 401Ks have a "Money Market" option (2+ / 0-)
    Recommended by:
    MKSinSA, Mislead

    It's the closest equivalent to "cash" in most 401Ks. In my old 401K it's where my contributions were temporarily parked until the actual purchase of the stock or bond fund I had chosen took place.

    You could just direct that your contributions stay in the Money Market part. It's the least risky, the safest and also has the lowest return - it's basically the equivalent of putting it in a low or no yield savings account in your own bank.

    You might consider doing this if you just want to hold onto what you have without subjecting it to the roller coaster of the Stock market casino. The advantage of doing this is that you will continue to accrue your employer's stock as their "match" part of your 401K which is essentially "free" money, and if you calculate the value of that stock in, you are actually getting a return by sticking with the 401K even if you just sit in the Money Market part.

    (I'm not a financial guru, but I did really really well with my own 401K just by paying attention and moving the balance from different sectors at appropriate times. My 401K had individual computer access to make these changes so I didn't have to go through the administrator)

    I also worked for one company once which had miserable choices in the 401K and because the company was privately held, their match was simply a miserly contribution in more miserable choices. In a case like that, you're better off just investing in your own IRA which you can set up on your own - if you set up automated contributions, you can mimic the discipline of a payroll deduction.

    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

    by Phoebe Loosinhouse on Sat Feb 16, 2013 at 06:34:19 AM PST

    •  Or use the "guaranteed" option (1+ / 0-)
      Recommended by:

      -- which of course isn't guaranteed in any meaningful sense, but as opposed to a 0% money-parking option like the "money market" account, it may pay 2-3%.  It's closest to an annuity account in its actual operations.

      TIAA-CREF has one; the guaranteed minimum interest is 3%, which is of course what it's paying until regulators allow it to rewrite its rules, which I suppose is going to happen any day now.  But it beats 0%.

  •  am not a financial expert, but (1+ / 0-)
    Recommended by:

    the options that would be looked at by me, if in your shoes, would be one or more of the following options:
    a) Discontinue participating in your company's 401K (it's voluntary...and while you may be losing the money your employer's contributing into it (if any), if it's become as worthless as you say...what's the difference?)
    b) After ceasing to put any more of your future money into your company 401K, you should be able to roll over your current vested holdings into another plan (another 401K that may seem to be performing well...for instance...the IRA that has actually performed tremendously well for me, in good times and bad (relatively speaking) is Parnassus, a socially responsible plan....they have always overperformed the market for me (though like everyone else they took a hit from 2008-2010).
    c) Instead of investing your own money into your company's 401K, be sure you take the amount you had been putting in and do something other than spend it (at least save it, even though savings interest rates are negligible these days, at least you won't lose it)...or put it into something that may get you a few interest points.

    Just some thoughts.

  •  Lots of good, standard, " move to a better fund" (2+ / 0-)
    Recommended by:
    corvo, Mislead

    advice.  But even the better funds too a huge hit a few years ago.  And if there is a repeat of 2008, they will take a huge hit agan.  I think that is what Mislead is concerned to get completely out of the craps game run by Wall Street, not how to find a better table.

    "We refuse to fight in a war started by men who refused to fight in a war." -freewayblogger

    by Bisbonian on Sat Feb 16, 2013 at 08:20:00 AM PST

    •  And that will be impossible (1+ / 0-)
      Recommended by:

      as long as the three branches of government remain reliable servants of Wall Street.

    •  But what is the current reality on the ground? (1+ / 0-)
      Recommended by:

      Like it or not, one needs to deal with the current reality and for most folks who plan to have some money beyond SS in retirement, that means dealing with a 401k/IRA/or similar.

      You're correct, everything took a hit a few years ago.  However, any investment with a modicum of diversity should be back to parity now.  If it's not, then it wasn't diversified enough, was an aggressive fund that hasn't rebounded, the investment was pulled while down and losses were locked in, or some combination.  Furthermore, there is a difference between a big transient hit and going to zero.  Yea, Enron holders went to zero.  However, if they held only or substantially Enron stock (or any other employer) only, they did that against virtually all standard advice out there.

      If one doesn't want to engage in this area, that's fine, just understand the tradeoffs involved, particularly if an employer match is left on the table.

    •  Bur "better funds" have pretty much (1+ / 0-)
      Recommended by:

      completely recovered since the crash.  S&P 500 has his record highs.

      Yes, the market will go down (Sometimes significantly), but as long as you don't sell masses of stock when it's at the rock bottom, it will most likely recover.

      If you were retired/retiring and needed to withdraw funds after the crash, you would have taken a huge hit, but if you'd left your remaining funds in the market, they would have recovered.

  •  The market going down is an opportunity (1+ / 0-)
    Recommended by:

    When the market goes down, two things happen:

    1. Your current investments go down in value
    2. Your newest investments (I am assuming that you are investing with each paycheck/monthly) are being bought low

    Buying low and selling high is the whole point. If you are investing periodically (as is the case with automatic payroll deductions) then some of those investments are at or near the low point. That is a good thing.

    401(k) investments are not evil. Still, there is risk.

    How to get out is simple. Roll it over DIRECTLY to an IRA of your choosing. Anything that is vested in your 401(k) should be available to roll over.

    There are IRAs that are guaranteed to never go down in value. These investments effectively offer you insurance against a drop in value. If the market is barely going up then your investment will stay level. That is the cost of the insurance.

    Hate micromanaging? If so then invest in a fund indexed to your retirement age. The fund will have a name like the 2035 fund. The fund will automatically become more conservative in its investments as your retirement age approaches.

    See a financial advisor. Your employer may offer a free option. The initial consultation with any advisor will always be free.

    •  But the market going down as retire is only (1+ / 0-)
      Recommended by:

      an opportunity to stock up on cat food.

      "We refuse to fight in a war started by men who refused to fight in a war." -freewayblogger

      by Bisbonian on Sat Feb 16, 2013 at 12:41:46 PM PST

      [ Parent ]

      •  That is why... (2+ / 0-)
        Recommended by:
        Mislead, k88dad

        one shifts from higher yield - but riskier and much more volatile investments - to lower yield and more stable holdings as retirement age is achieved.

        The problem is that this transition is really not one most folks are equipped to navigate from the perspective of subject matter expertise or emotion.

      •  From the very post that you are replying to (0+ / 0-)

        "Hate micromanaging? If so then invest in a fund indexed to your retirement age. The fund will have a name like the 2035 fund. The fund will automatically become more conservative in its investments as your retirement age approaches."

  •  Financial education is really what's lacking ... (1+ / 0-)
    Recommended by:

    Reading the many comments here and based on some discussions I have had, I have the feeling that Financial Education is something that is being taken too lightly in this Country.

    1. 401k Investment is NOT mandatory. People can opt-in or opt-out. If you don't wanna do it, just stay away from it and take your ca$$$ home.

    2. When you invest, you MUST know your risk tolerance. If you can't stomach a 40 or 50% loss of value of your $$$, then park your money into money markets or savings accounts. Nothing prevents that.

    3. When you chase big returns, you need to understand that you expose yourself to massive losses too. If you don't have the balls to stomach the losses ... don't do it.

    4. Buy low, sell high is really the key. When markets go down, it is an opportunity to buy. Lots of people panic and get out when the market drops ... and try to get back in, when things appear to look up ... Typical recipe for losing your money.

    5. If you are nearing retirement, GET THE HELL OUT OF THE STOCK MARKET.

    6. The stock market is not the only option. I have friends who have never put a dime in the stock market. They bought rental properties very wisely and managed them themselves. Many of these properties are almost paid off today.

    7. I think Financial Education should be taught in school as a mandatory course, especially if we are being told to rely on ourselves for retirement, but we have to pay "financial advisers" so they can screw us many times over. Any school reform that doesn't include financial education ... is simply not good enough.

    8. An Interesting bet Warren Buffett made with Hedge Fund Managers .... Lots of these hedge fund guys are charging massive fees ...
    Just my 2 cents...

  •  Lots of great information... (0+ / 0-)

    Thanks for all the input folks!

    Men with religious beliefs have killed more people than any god that they have created...

    by Mislead on Sat Feb 16, 2013 at 04:05:20 PM PST

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