401K's and IRA's A Question.

18 posts / 0 new
Last post
Morpheus's picture
Morpheus
Status: Diamond Member (Offline)
Joined: Dec 27 2008
Posts: 1200
401K's and IRA's A Question.

I need a little help and with so many bright folks here perhaps someone knows the answer that eludes me.

I have a 401K containing  a decent amount of Digital Federal Reserve Notes from when I started with my latest employer nearly 12 years ago. I smartened up in 07' after doing the math and realized that it's not worth contributing to, even with matching contributions (just my 2/100th's of a reserve note, for what it's worth).

Regardless. I have a problem. My options in the account are pathetic. Now this is rich. Ready?

Money Rackets, err Money Markets.

Bonds, Federal Bonds.

Small Caps (basically the $RUT)

Large Caps ($SPX)

plus mid-caps, an international fund (that I can only move in/out of every 14 business days) and my own company's stock.

I don't like the options at all. (Although I can redistribute once daily at COB and when spooked I go 100% in Money Rackets, err Money Markets).

My employer no longer contributes, I no longer contribute. How, legally is there any way of moving this into a move flexible retirement vehicle with more options (IRA, Roth IRA) without needing to be laid off?

I've been digging into this on and off for a while. I can't seem to find a way. Does anyone know?

I'm concerned that within a few years it'll vaporize. Heck, Perth Mint Certificates, agriculture stocks, water and utility stocks, and PM bars is where I want it. Fat chance stuck in a 301K (adjusted for inflation).

 

 

 

 

 

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
Re: 401K's and IRA's A Question.

Morph,

 

Your choices don't seem to be very attractive. I had a similar problem with a 403 B but since I am over 59 1/2 there was an option with the district plan to roll over the 403 b into an IRA. The IRA has many more options.

 

I hope you can find a solution to get your money out.

 

Good luck ,

Ken

 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: 401K's and IRA's A Question.
Morpheus wrote:

I need a little help and with so many bright folks here perhaps someone knows the answer that eludes me.

I have a 401K containing  a decent amount of Digital Federal Reserve Notes from when I started with my latest employer nearly 12 years ago. I smartened up in 07' after doing the math and realized that it's not worth contributing to, even with matching contributions (just my 2/100th's of a reserve note, for what it's worth).

Regardless. I have a problem. My options in the account are pathetic. Now this is rich. Ready?

Money Rackets, err Money Markets.

Bonds, Federal Bonds.

Small Caps (basically the $RUT)

Large Caps ($SPX)

plus mid-caps, an international fund (that I can only move in/out of every 14 business days) and my own company's stock.

I don't like the options at all. (Although I can redistribute once daily at COB and when spooked I go 100% in Money Rackets, err Money Markets).

My employer no longer contributes, I no longer contribute. How, legally is there any way of moving this into a move flexible retirement vehicle with more options (IRA, Roth IRA) without needing to be laid off?

I've been digging into this on and off for a while. I can't seem to find a way. Does anyone know?

I'm concerned that within a few years it'll vaporize. Heck, Perth Mint Certificates, agriculture stocks, water and utility stocks, and PM bars is where I want it. Fat chance stuck in a 301K (adjusted for inflation).

There is always the nucler option - paying taxes out the perverbial. Stunk but something is better than nothing. 

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1207
Re: 401K's and IRA's A Question.

Morpheus,

If you're still employed by the company that's managing your 401k fund, the options amount to Jack and... well, you know.  I explored this option myself earlier this year and found that while I'm still employed with the company and younger than 59 1/2 years old, there's no normal way to cash out or move my 401k elsewhere.  As far as I know that's universally true with 401k's no matter who you work for.  I only found two ways to move that money.... the first is claim a hardship withdrawal, which only works if you can PROVE a qualifying hardship and even then you can only withdraw the amount needed to address the hardship.  For me that was not an option... my finances are good (perversely preventing me to access my own money Yell), and the only hardship avenue available to me is to take a hardship withdrawal to buy a home (and I don't want to buy at this stage).  The second way is to take a loan from your 401k.  I don't see much point to that option seeing as you have to pay it back.... so it's kinda useless unless you expect your 401k fund to collapse and just want to be able to get SOMETHING out of your account.  To be honest though I've been reexamining that second option lately.  Still in a wait and see mode right now, but I'm prepared to go ahead with it pronto if I see something bad coming down the pipe.

- Nickbert

JRB's picture
JRB
Status: Silver Member (Offline)
Joined: May 17 2009
Posts: 149
Re: 401K's and IRA's A Question.

Check to make certain.  Depending on the rules for the 401K, you can roll over to an IRA.  Not sure what the distinction is.  Mine is administered by Fidelity not the company.  Last year I was able to roll funds out of my 401K into a self-directed IRA.  Just check to make sure of the rules.

- Jim

twig_oak's picture
twig_oak
Status: Member (Offline)
Joined: Aug 29 2009
Posts: 11
Re: 401K's and IRA's A Question.

I agree with JRB, you may want to double check with the administrator of your 401k. Just a thought here if you are unable to roll over your account to a self directed IRA you may want to consider taking out a loan from your 401k for the maximum amount allowable and for the longest repayment schedule allowable. This would allow you to gain control over a portion of your funds (without taxes and penalties) and align them with your beliefs of whats to come, IMO the SHTF sooner than later and you would be able to at least salvage a portion of your account. Just my two cents.

 

Matt

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1207
Re: 401K's and IRA's A Question.

JRB-

Guess I could be wrong about that being universal.  Meh, guess that's what I get for listening to a 'professional'.  After seeing your post, I dug around and came across this:

http://www.accumulatingmoney.com/can-i-rollover-my-401k-while-still-employed/

Their answer is 'usually no' but mention a minority of companies do allow rollovers.  Very interesting... wish my company was one of those.

Matt-

As mentioned before the loan possibility is something I've been looking at; my issue is that I'm still weighing the benefits and risks and also brainstorming on potential places to move this money into.  Perhaps put a portion into PM's and keep the rest in cash form, free to move around as needed.  The best plan that I can come up with is that keeping a good measure of liquidity is the smartest play at this point.

- Nickbert

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: 401K's and IRA's A Question.

Not allowing rollovers into IRA's should be criminal.

I will NEVER participate in another 401k again, I don't care how much I leave on the table with matching contributions.

Woodman's picture
Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1028
Re: 401K's and IRA's A Question.

I'm like you, stuck with a 401K with traditional, limited options for mutual funds plus a treasury money market fund.  Diversify by investing 25% each in growth, aggressive growth, international, and bonds or whatnot they said, and watch it earn 8% per year on average.  And that worked for a while.  But now I understand what a ponzi scheme it really seems to be.  With a 401k, you give up a lot of control to the devil in return for tax deferment. 

Even though I can't remove the money now without quitting, I look at my 401k as a hedge against deflation.  I've balanced that with other savings that ar not dollar based, to hedge against other financial scenarios. 

Tom

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: 401K's and IRA's A Question.

Morpheus,

I had that problem a few years ago.  I liquidated it and paid the penalty.  They withheld 20% but after I filed taxes, I got half of that back.  All told, I lost 10%.  Worth every penny in my case.

Thomas Hedin's picture
Thomas Hedin
Status: Platinum Member (Offline)
Joined: Jan 28 2009
Posts: 815
Re: 401K's and IRA's A Question.

There is no such thing as digital federal reserve notes.  Those digital entries represent amounts owed by banks to their depositors.

Morpheus's picture
Morpheus
Status: Diamond Member (Offline)
Joined: Dec 27 2008
Posts: 1200
Re: 401K's and IRA's A Question.
matt31nancy wrote:

I agree with JRB, you may want to double check with the administrator of your 401k. Just a thought here if you are unable to roll over your account to a self directed IRA you may want to consider taking out a loan from your 401k for the maximum amount allowable and for the longest repayment schedule allowable. This would allow you to gain control over a portion of your funds (without taxes and penalties) and align them with your beliefs of whats to come, IMO the SHTF sooner than later and you would be able to at least salvage a portion of your account. Just my two cents.

 

Matt

I have already done that. Didn't spend a dime of it like a silly US consumer would either. LOL It's all in more preferential investments. Those eggs are NOT diversified as per "conventional wisdom" *cough*.

I have all of my eggs in a few baskets (hedging for deflation as well as dollar collapse) but I watch those eggs very very closely.

But, I want the rest out of harms way. I dunno, something tells me that if I haven't been able to find a way by now then the rest is probably trapped in a deflationary/hyperinflationary time bomb. I just figured that their might be someone here that was able to do it and others here in the same situation. I'll keep chewing on all of these comments. Thanks folks, good stuff.

Morpheus's picture
Morpheus
Status: Diamond Member (Offline)
Joined: Dec 27 2008
Posts: 1200
Re: 401K's and IRA's A Question.
Thomas Hedin wrote:

There is no such thing as digital federal reserve notes.  Those digital entries represent amounts owed by banks to their depositors.

They're not denominated in dablooms though! Laughing

I wish they were. Spanish da blooms are not only rare, but they're gold.

Morpheus's picture
Morpheus
Status: Diamond Member (Offline)
Joined: Dec 27 2008
Posts: 1200
Re: 401K's and IRA's A Question.
Farmer Brown wrote:

Morpheus,

I had that problem a few years ago.  I liquidated it and paid the penalty.  They withheld 20% but after I filed taxes, I got half of that back.  All told, I lost 10%.  Worth every penny in my case.

FB. I was going to PM you on this, but it appears that my hunch was right. More than just I are stuck in this situation.

So, if you wouldn't mind, care to explain HOW I can invoke the nuclear option? I called the broker and they of course said "no, you're still employed".

Here's what I want to do with it: Foreign cash and gold (for deflation), gold and silver (inflation), some more mining stocks, water resources, agriculture. Obviously, you can tell that I am hedging my bets here. I distilled a hypothetical scenario where we actually could go through a period of severe deflation preceeding a hyper event. (which I might share slides here later).  You have to make it throught part (a) before worrying about part (b), right? Ahh yaay yaay, this is becoming twisted. LOL

Might even buy a few shares of Government Sachs. I'm not fooled by their stock's performance one bit. Besides, good Americans invest in their nation, right? Surprised

Thomas Hedin's picture
Thomas Hedin
Status: Platinum Member (Offline)
Joined: Jan 28 2009
Posts: 815
Re: 401K's and IRA's A Question.

Thomas Hedin wrote:

There is no such thing as digital federal reserve notes.  Those digital entries represent amounts owed by banks to their depositors.

They're not denominated in dablooms though! Laughing

I wish they were. Spanish da blooms are not only rare, but they're gold.

 

The  Federal Reserve notes are denominated in the bank credit though.  The bank credit has to exsist before the FRN's can enter circulation as money.

Morpheus's picture
Morpheus
Status: Diamond Member (Offline)
Joined: Dec 27 2008
Posts: 1200
Re: 401K's and IRA's A Question.
Thomas Hedin wrote:

Thomas Hedin wrote:

There is no such thing as digital federal reserve notes.  Those digital entries represent amounts owed by banks to their depositors.

They're not denominated in dablooms though! Laughing

I wish they were. Spanish da blooms are not only rare, but they're gold.

 

The  Federal Reserve notes are denominated in the bank credit though.  The bank credit has to exsist before the FRN's can enter circulation as money.

Well, whatever then TH. I am sure that we both don't want this thread to deteriorate into quibbling over semantics regarding the nomenclature of currency. Especially since I could use some help here! Cool

RNcarl's picture
RNcarl
Status: Gold Member (Offline)
Joined: May 13 2008
Posts: 382
Re: 401K's and IRA's A Question.

Just a thought,

I have seen my 401K loose 25+ percent before i got the money into "safe" water.

I stopped and my wife stopped contributing. We took this now "liquid" money and fevorusly began paying down debt. HOW LIBERATING!!

i am considering cashing out my account(s) with whats left, cut my losses and pay off the rest of my debt.

My hardship is going to be a job transfer and subsequently the need to purchase another house while "trying" to sell my current home.

i dont know if it will fly, but thats what i am going to try. I also will be one of those folks who will try and get some "free money" as Chris just spoke of.

Whats th take away from my saga that you can use?

ELIMINATE DEBT!

To carry debt (of any kind) while pouring hard earnd money into the 401K Ponzi only keeps you enslaved. My gosh, I ran the numbers last night and if I had used the money i poured into the racket to pay off my existing debt... I would have already been totally Debt free!

Hope this helps - C.

Woodman's picture
Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1028
Re: 401K's and IRA's A Question.

I generally agree with you there carl on debt.  Thanks to this website last year I sold off  some stocks before things really crashed, and paid off my vehicle.  The interest rate on the debt was about the same as the dividend return on the stocks, but paying off the debt was a 100% risk free and tax free return.   Plus, I'd broken my long standing rule of never buying a vehicle I hadn't saved enough money beforehand for, so getting rid of that debt was definiting liberating.  

Everyone's situation is different, so everyone should  run scenarios for savings vs. debt, identify the risks and returns, and figure out what is the best long term option for them.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments