Cashing out your retirement early and buy PM's?

7 posts / 0 new
Last post
docrock's picture
docrock
Status: Member (Offline)
Joined: Jul 7 2010
Posts: 9
Cashing out your retirement early and buy PM's?

OK...here's my situation...I'm 46 and have  upper 6  figures in a 401(a) plan...I am planning on placing a significant amount of my money in precious metals  and have been looking at the options. After taking CC I'm seriously contemplating cashing out my retirement as the risk of confiscation/increased taxation concerns me...i know this has been a topic of discussion in the past, but I'd like to revisit it. 

I'm aware of the taxes/penalties with early withdrawal. 

Just looking for guidance and experiences...

As always, Thanks in advance...

Docrock

 

 

 

 

Ken C's picture
Ken C
Status: Platinum Member (Offline)
Joined: Feb 13 2009
Posts: 753
Re: Cashing out your retirement early and buy PM's?
docrock wrote:

OK...here's my situation...I'm 46 and have  upper 6  figures in a 401(a) plan...I am planning on placing a significant amount of my money in precious metals  and have been looking at the options. After taking CC I'm seriously contemplating cashing out my retirement as the risk of confiscation/increased taxation concerns me...i know this has been a topic of discussion in the past, but I'd like to revisit it. 

I'm aware of the taxes/penalties with early withdrawal. 

Just looking for guidance and experiences...

As always, Thanks in advance...

Docrock

This subject has come up several times in the past. I am sure that if you do search you will find some threads with lots of useful information.

 

Ken

 

 

 

 

 

 

sevenmmm's picture
sevenmmm
Status: Silver Member (Offline)
Joined: Jan 19 2011
Posts: 108
Re: Cashing out your retirement early and buy PM's?

Everyone's situation is different. Best to consult someone who has been in a similar circumstance (um, maybe the owner of this website?). The only advice I would give is to use the money to lower your ecological life cost. I know a guy in the upper peninsula of Michigan that has lived on $3500 a year. I can tell you how he does it if your interested.

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 3200
Re: Cashing out your retirement early and buy PM's?

docrock

My situation is different than yours in that I am old enough to withdraw the 401 money without penalty.  About two years ago I withdrew about 60% of the money because I didn't think the plan offered any good altenatives.  The remainder of the fund was left in gov't securities which, as it turned out, at least didn't lose much money.  I'm not at all confident that will remain true.  About 6 mo. later I rolled part of the withdrawn money into a PM Roth IRA.  I took a big tax hit, but so far I've about doubled the dollar value I lost to taxes.  So, for me it was worthwhile.

Although I can't withdraw any more of the 401 money until I retire, I am considering borrowing part of it to put into the PM Roth IRA.  I haven't studied the ramifications enough to feel confident in that move yet.  At this point, I have about 20% of my cash equivalents (including retirement money) are in PMs.

The bottom line for me was and is, whether the expected return, in wealth and security, makes the move worthwhile.

Doug

docrock's picture
docrock
Status: Member (Offline)
Joined: Jul 7 2010
Posts: 9
Re: Cashing out your retirement early and buy PM's?

Doug... Thanks for your reply... As I see it, I have three concerns... First, the purchasing power of the dollar will,IMHO, continue to decline due to our present monetary and fiscal policies. Tomorrow's dollars will be worth a lot less. Second, I believe their is a very real risk of manipulation/taxation or outright confiscation of my hard earned retirement monies in order to supply a "solution" to our ever expanding debt and entitlement shortfalls. Third, I have a 401a plan which makes transfer to a PM IRA possible only if I quit my job...I could perform an in kind transfer with a custodian, but I'm not very trusting of the layers of complexity an outside agency adds to the process of owning metals in a retirement account. I'd rather have control of my money now, but the irrevocable nature of this decision lays heavy on my heart... Am I thinking about this clearly?

ljhaines's picture
ljhaines
Status: Bronze Member (Offline)
Joined: Apr 23 2009
Posts: 35
Re: Cashing out your retirement early and buy PM's?

DocRock,

Here is one possible solution if you don't want to take possession of high 6 figures of physical metal....1. Talk to your employer about becoming a self employed consultant under a contract to work and if they agree, you could then be eligible to transfer from your 401K plan to an IRA. Use a self directed IRA (Google them if you don't know what they are) which allows you to direct the custodian to purchase PMs in your IRA through a buy and store company. This way you can purchase PMs in 2-3 locations around the world, say Switzerland, Australia and the US in the event of a national issue. These self directed IRAs also allow you to loan money to people other than direct linage so no loaning to dad, mom, son or daughter. Brothers and sisters or trusted friends are OK. What they do with the loan is their business as long as the paperwork is in order in terms of promissory note with terms, etc. I use Entrust Retirement services but there are several to choose from. Hope that is an option for you. It would certainly increase your buying power vs. early withdrawal.

docrock's picture
docrock
Status: Member (Offline)
Joined: Jul 7 2010
Posts: 9
Re: Cashing out your retirement early and buy PM's?

Thanks for your reply....

I'll look into it...

Mike

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