Thoughts on savings/401K and predictions of economic collapse...

I have been thinking of talking with my "financial advisor" about taking my RRSP (kind of like the US's 401K from my understanding) one of which is based in stocks right now, the other two are cash/interest accounts and converting them to gold-based - where I can "cash-in" at anytime and have them produce the gold within days, no questions asked.

I don't know if my banks will do that for me - so - that is where I am sitting.

I don't have the means to "stash" gold or gold-coins in a safe way, so, for now, I am at the mercy of others.

 

I've been pondering the same for the last several months.

I did cash out one of my small 401K's that hasn't been performing very well for this exact reason.

For now, I've kept it as cash and am still in the period where I can roll it over but doubt I'm going to do so.

Since I still have a bit of a mortgage, if SHTF, my plan is to apply it to that as a couple years worth of payments. Even if the dollar collapses, the contract with the lender stands and they have to accept it as payment.

If I have a week or 2 before SHTF, I'll cash out other 401K's and get rid of the mortgage completely. The extra would be used to do final-minute purchases for being prepared. I'll also keep enough cash available for paying property taxes, insurances and other bills for a year. If a bad crash occurs, there's a possibility I wouldn't be working so I'll need to retain a cache to cover bills.

The process is pretty quick. You need to fill out a form and get it back to them. I faxed it so it was there the same day. I got my money within a week (as a check).

I would consider talking to your plan administrators to discuss the process, timing (duration before you get payment) and such now so it will be a quick transaction if/when you do it.

 

I got out of ALL investments, including savings accounts, everything.....in the early fall of 2008. Man do I sleep well, NO worries.

 

I also got out of eveything, except my checking account. Need it to pay the bills. Bought a nice little fire prof safe that hold what I need and I can carry it or hide it any where. I plan on turning my paper cash into gold and silver coins soon, looking for the best dealer. I want to see the coins in person before I hand over any cash. To many Banks say you have this and that, but it all on computers now and they seldom keep enough cash to pay every who wants their money if there is a run on the bank.:sssh:

 

Going Against the Tide

While, I have prepared for the worst, I don't believe it will happen in my life time. I have food, own my remote home (along with the taxman). I can easily live for over 2 years without outside assistance. I have 3 years income in FDIC accounts and some money (if it gets bad it wont be worth much anyway)at home. However, I have most of my money invested in stocks, bonds, MM, annuities etc. The one thing people need to be prepared for is, what if nothing ever happens. Unless your real rich or real old that money in the mattress won't last as long as you will (retire and enjoying it).

Littlebit,
I had some money in a "good" fireproof safe. My house burned down and the safe was not that fireproof. Insurance only covered $200 cash and I did not have enough evidence to get it replaced by the treasury. Better make sure it is fireproof. And yes I have had to go to many different branches to get all my cash before. They don't keep much cash on hand.

 

Longtime- Thanks for your concern I do have one of best fire safes you can get and I never keep all my eggs in one basket.

I hope nothing happens in my life time or the generations to come. I consider preparing for any event an investment my family can benefit from in the future or next week.

 

Withdrawing my 401K money when I was younger was easily the biggest mistake of my financial life. You think you can wipe out some debts and quickly rebuild your nest egg, but that isn't so easy. No matter what, you'll have to have something to retire on.

If you are feeling shaky about the markets, I'd recommend gradually switching to more conservative investments and investing a portion of your money in things like gold. Perhaps 5 to 10% of your portfolio could be in "end of the world" investments (land, gold, etc.)? Also, make sure you have a diversified portfolio of investments.

If you can, try to at least put in a % of your salary required to get your employers' 401K match. Yes, the world could financially collapse. But, billions of people including all of us are doing our best to ensure that does not happen.

It's one thing to go off the grid and live in a garden shed sized cabin because you want to. It's quite another to go off the grid and live in a garden shed because you have to.

 

Tim,

I heard a Christian financial counselor recommend buying 'oil' as stock...

Sounds good to me...

He says, 'gold will be hard to get rid of',and 'our government might come after the gold' if our US economy falls.

The problem for most Americans that still have employment is that they can't withdraw their 401Ks from their company..

We steer clear of 'stocks',but I don't feel safe even with the safest retirement the company offers..

Most of the retirement plans are the big banks that got bailed out....

Thanks,
~Jeani

 

IRA rollovers, etc.

Vanguard has a fund devoted to US Treasuries. While not fail-safe, it's much safer than stocks and doing quite well for now. It's vfiix. If you can't cash out, changing to that option might be the next-best thing. Canadians are in better shape, but we here in the US are a big drag on all the other countries.

As for silver and gold, I keep some, but prefer to stock on things that will be needed. Insulation in our house, some light bulbs, some propane for the lamps, some herbs for healing and seasoning, small bags and a scale for bartering same. Also oils and alcohol to prepare tinctures, etc for use. Think about what you know and invest in that: skills, tools, supplies, etc.

 

Judygranny, well put definately doing what you know is the best investment you can make. I think investing in the stock market with your excess money is a great way to get rid of it.

 

I woudl not draw down a 401k or other retirement plan - that will cost you a lot in penalty and taxes unless you are over 55. Instead I'd let those balances grow and "invest" in paying off your debts so that you don't have to pay interest of lose your house in case you lose your job etc. After that I agree with stocking TANGIBLES that have real value - like FOOD. If you know guns and ammo they can be good investments, but so too can almost anything that you really KNOW. Buy cheap for cash, stack it deep, and only sell for gain.

 

While there is a cost to early withdrawal, think of what you could lose through 30%, 40%, or 50% inflation. The penalties would be more than offset by investing in "stuff" before inflation kicks in.
I'm no economist but the U.S. government really only has 2 options in regards to the massive debt it has incurred over the last 40 years; default on it's obligations or inflate it's way out. IMHO inflation will be the option they chose. But who really knows what will happen. :dunno:

 

I don't think I'd spend every last dime, but I'd buy food and essential supplies with the rest of my dimes!

It's remotely possible that we could have "deflation" but I believe inflation is a real possibility.

 

Those are indeed two of the options but I think the third - to keep lying to the world- is more likely. Our government has never dealt with the debt and I doubt anyone can force them to now. I am not a prophet but I strongly suspect that the US will NOT default, and while inflation will continue as it has for most of our lifetime, I do not see hyper inflation as more likely than continued ever growing debt. I think the US will borrow more long term debt to meet any present obligations and continue business as usual, simultaneously raising taxes and handing out unemployment benefits.

 

We rolled over hubby's 401 into a CD years back. He just recently said that we should maybe take the money and build a "root cellar" and get some other things. I told him to stop making my heart go "piddy-patter" LOL
I told him the more we were able to be self sufficient the less we would have to worry in case he loses his job.That what money we did make would be able to go to taxes and such.It's so hard to know what to do. We've worked so hard to get where we are,and having idiots who have their butts covered destroying it for us, is very disheartening to say the least.Sometimes makes me want to just throw up my hands and say the hell with it! But I don't.

 

I happen to agree. That is why I am planning on drawing mine out. Even with the penalties, I have enough to pay all my bills and taxes, and still have money left to do some work around the homestead. And I would feel better being out of debt

 

I'll pile on and say that I've taken some out as well. I keep seeing prices going up on things but my salary remains the same. I'd like to have no debt and the provisions I need whereby I can go without having to spend much should there be a collapse of the dollar or the known/upcoming tax increase.

Yea, I'll pay a 10% penalty now but that's still less than the 20%+ tax hike we'll all be seeing in the near future.

 

I have to agree that getting out of debt is a great idea. While I am leaving my retirement investments alone and continue to contribute 6% of my salary to buy more, I am dumping every dime not needed for living expenses into paying off debt. By God's grace we have killed the credit cards and car loans and I'm now paying extra on the mortgage. Only after all debt is gone and the price of the next car is in the bank would I even consider upping my retirement contribution. I am also a big believer in a deep larder of tangible goods including food. If I had to choose, I would say buy a few months worth of food and meds first, then pay down debt, then save for the long term. I'm just choosing to cash flow the purchases and debt reduction without taking the 45% hit on the retirement savings. Remember it is not just the 10% penalty, you also have to pay income tax on it, so add 28% for the feds and in my case about 7% for state. It just doesn't make sense to give the government nearly half of my savings.