Already did

I didn't have a huge 401k but I cashed it out. I paid the estimated taxes and plan to pay off a bunch of medical bills, which will qualify me to not take the early withdrawel hit. I talked to my tax lady at length before making my decission. By paying medical bills the 10% I would have had to pay for early withdrawel covered the medical bills which I wanted to pay anyway's. My wife had a major surgery and the Doc's wrote off over $80,000. So I thought it was a win win. Walstreet, the Gov't and anybody else can't get my money now, I buried it in the yard...

 

here's a little generic info...

401k Hardship Withdrawal

 

Redcat,

Don't know what web sites you stumbled across, but be careful most are scams!

 

Yeah, that's what I figure. As soon as they ask me for money my suspicious factor goes way up.

 

To be honest, I have a few grand stuffed in various places, that I have thinking about pulling, since I am about to turn 40 and to do not have the extra currency to invest anymore, so I am not likely to have a retirement. I figured I could used the money to pay down debt, get preps, etc. instead of watching it drain away while some fatcat wall streeter gets fattter

 

Congress writes the laws that Wall Street abides by. The White House / Executive Branch puts or removes emphasis on the SEC and DOJ to enforce the laws.

It is easy to blame "Wall Street", and I am not defending them, but it is too easy to BLAME a faceless "evil" Wall Street.

If you are in solid companies for your IRA or 401k, market fluctuations and timing may be your short term enemy, but certainly not long term.

Now, the government "annuitizing" all retirement accounts such as Tom Harken and Harry Reid propose is nothing short of Nazi Socialism on a grand scale.

It would take a serious financial crisis and staggering debt to allow the political "fat cats" to implement that.............oh wait, nevermind. :surrender:

 

We are in the agricultural business...
People are cashing in 401ks and buying tractors, etc. Should the SHTF, at least they would be able to tear up a piece of ground or lots of ground to get something growing....

Also, my opinion would be to use it to get out of debt, especially on liens against property.

 

I'm leaving mine alone and watching the GROWTH continue. Diversify your portfolio so that as some funds take hits others gain. If you want to stop contributing additional funds to your retuirement accounts that's fine but if you cash them out before you are 59 1/2 , you give the government +/- 40% Why would you voluntarily give the government 40%???? (38% = 10% penalty+28% tax rate).

No thanks! There is no way I am giving the government 38% of MY money if I can avoid it. I'm leaving it alone and letting it grow until I retire and my taxable income goes to zero. Then I will draw it out penalty and tax free!

I advise you to do the same.

 

You can have self-direct IRAs and 401Ks, which you fund with your own physical silver, gold and platinum. All the benefits of owning physical metal, but that money actually works for you. Not an ETF or paper investment, but your own real metal.

More info here:
American Eagle Gold Bullion Coins

 

Tax on an IRA withdrawal is not the worst thing you might face

GroovyMike,

Inflation is a tax and it just might be much bigger than 38%, especially compounded.

I do not have a 401(k) because I rolled it over into an IRA. Then, I could buy CEF, PSLV and PHYS. I'd prefer physical PM (which I also have), but then the tax is an issue.

If you are in a 401(k) - avoid any bond funds, especially containing government bonds. Cash will be as bad. Since 401(k)'s offer limited options, real diversification is very difficult, but look primarily for the blue chip equity funds in "essential" industries.

The stock market is where it is because of the money the Fed has pumped it up with. There is no way to justify the S&P or the Dow numbers otherwise. Watching the GROWTH is unlikely to be the future. It is all going to be worth less, even if the dollar amounts stay the same. Which I doubt.

Unless you are in a Roth IRA, you will be subject taxes when you draw it out in any case.

My estimate is that unless your employer gives you a good matching contribution, it is better to pay the tax from your income, save, and put the proceeds into a Roth where you have more investment choice. A Roth is completely tax free after you make the contributions (on which you already paid taxes).

 

1)Talk to a tax attorney.
2) Dont discuss anything you may or may not do that may or may not be illegal on an internet forum.
3)Convert your money into tangible assets.
4)Bury them.

 

I would certainly convert my money in tangible assets; stocks and the stock market will always screw you over in the end.

1. I have some money buried.
2. I have some money in several savings accounts.
3. I own real estate. Buying houses that are in areas of high/growing demand is a good idea. If you're handy you can renovate them yourself and then resell them for a profit.
4. I (partly) own a few small companies that bring in enough for a modest salary. This isn't like owning stocks because I play an active role in decision making with all these companies.

I read an interesting PDF a while ago about true offshore banking. It explains how you can make your money invisible to anyone from your wife to the IRS.
I can't remember now where I read it, but when I find it again, I'll post a link to it.

 

Just to be clear - I see nothing wrong with buying tangibles. In fact that is a wonderful idea. But I would not do so at a 38% loss off the top. If you want to do that, send me market value plus 38% markup and I'll sell you my ammo and silver coins today. In my opinion it is a mistake to cash out your 401K and take the 38% butt kicking. Instead, I'm advising you to leave it alone - hedge your bets that the world as we know it will NOT end. If you need tangibles go ahead and buy them instead of contributing more to your 401k. But don't throw away 38% by cashing it out.

Hawat - inflation is real - but it is not a tax and it is no where near 38%. Trust me on this, I'm an accountant.

 

GroovyMike,

If we assume inflation at only 5%, which, while higher than government figures is lower than what is presently happening, you lose 34% in 10 years. If inflation is 10%, significantly less than Dhimmi Carter's performance, you lose 33% in 5 years. I'm not even contemplating hyperinflation here.

And I don't think you are either. You are assuming the equities available in a typical 401(k) offer safe investment opportunities. I hope you are right, though 2008 returns would argue otherwise.

If you had withdrawn from your 401(k), had paid the 38% and had put the proceeds into a Roth (in CEF, for example) in June of 2010, you'd have more than all of it back tax free now - and tax free forever. You also would have been able to spread the tax out, so it might have been less than 38%. Sadly, that advantage is no longer available.

Even so, when Gold hits $2000 or silver hits $75, the value of your savings in that Roth would have increased more than any equities in some 401(k) mutual fund. Gold and Silver are not going up, the dollar is going down. The bubble is in Federal Reserve Notes.

Because of that FRN bubble, there is also a bubble in the stock market. It is up ONLY because Ben Bernanke is flooding the world with Federal Reserve Notes. If we don't get QE3, equities are going to tank. If we do get QE3 equities will tank later and more severely.

YMMV, based on age and level of other income. Still, you would only have paid 38% once, while inflation compounds. From a general advice standpoint, also consider that many of us would pay less than 38%.

I (probably) wouldn't withdraw if I had to pay a penalty, but it can be eminently sensible if you think there is any chance of serious, or especially hyper-, inflation. That's what PMs protect you from. I've never seen a 401(k) that let you buy PSLV or PHYS or CEF, or actual physical gold. (Or even GLD or SLV, but I'd stay far away from those.) You can do all of those in your own IRA account, Roth or not. So, at least roll your 401(k) into your own regular IRA account as soon as it is possible. That is free, and having your own account (with a vastly larger investment universe) is a great incentive to pay attention to your investments. Failure to do that is the bane of 401(k) participants, and I know because I have administered 401(k)s.

 

I have read you can borrow against your 401k(repaying that loan is interest to yourself) and you could use it to purchase phyiscal assets(a barn full of copper,if thats your cup of tea). This method would allow you to avoid the taxes and penalty,and best of all you can repay the loan and reinvest in the market if ts (does not) htf and govt does not sieze 401k's(did it in argentina). Your ability to pay back this loan is the only limiting factor. If,you do not have the financial means to repay loan only invest a portion for preparation and use the rest to payback loan. The reason i suggest that you payback the loan with your own borrowed money,is it allows you to see if things will really get bad and you will not have any risk to the market. I have been thinking along these lines myself. My trigger to do this will probably be qeIII(more monetary debasement). I will be investigating this further(i mean right now),the forms i need to fill out,how long it takes to get the money,if the assumptions i outlined are correct and anything else i can think of. I hope this helps you.

 

Inflation retrospective

Just to make the point that much of the gain in your 401(k) is currently illusory, here's another look at inflation:
News Headlines

The biggest problem is the small number of choices in the typical 401(k). They aren't good enough to avoid the tax that is inflation. And, yes, it is a tax.

If the government clipped coins, and they did do that when coins were gold or silver (and without reeding), you would easily see it as a tax.

Inflation is just coin clipping by other means.

There are a dozen places to find out about this, but I think The Creature from Jekyll Island would do nicely.

 

I don't believe those websites are legit. You might want to consider getting a loan from your 401k and buying gold. I use bullionvault.com. They store the gold for you and charge you a small fee to store it there.

 

I don't believe those websites are legit. You might want to consider getting a loan from your 401k and buying gold. I use bullionvault.com. They store the gold for you and charge you a small fee to store it there.

Not a real good idea to buy gold or silver from a company and pay them to store it for you. Most times they do not actually have the metal. You only get a piece of paper saying you have x amount of metals. Getting the metal can become a real problem if there is ever a SHTF situation. Much better idea to hold your own metal.

 

It depends on the company. BullionVault has been in business for years. You can find a review of them here:
Bullion Vault: A Review of Gold Broker BullionVault - InformedTrades
One thing I like about them is that you can choose which country you want your gold stored in. I'll be having mine stored in Switzerland.

 

To be honest, I have a few grand stuffed in various places, that I have thinking about pulling, since I am about to turn 40 and to do not have the extra currency to invest anymore, so I am not likely to have a retirement. I figured I could used the money to pay down debt, get preps, etc. instead of watching it drain away while some fatcat wall streeter gets fattter

IMO,this is very wise.They got my friend for $70,000 a couple years ago.He was devastated to say the least.

What took him decades to save up he crooks took in a matter of seconds.then handed it over to the corporate crooks.No bailout for him.

 

I've done some searching, and bullionvault is looking more and more promising. I just liquidated by 401K, so it looks like I'll be moving some money into silver.

 

Peter Schiff recommends this kind of thing, storing your silver in foreign accounts, but that whole idea sketches me out. Im supposed to believe its safer for me to store my pms thousands of miles away, controlled by someone I have never met, and on top of it, I have to pay for the 'service', than to bury it in my backyard or whatever?
That makes no sense.
If SHTF, obviously you are SOL, and will not be seeing any of it.
You would now be officially trying to 'hide' assts from the gubt.
Obviously these kinds of transactions would be much easier to trace, as you are generating all kinds of paper trails.
As far as I know, the Swiss are no longer safe haven from the gubt, didnt they recently turn over accounts to the US?
I would think it would make more sense to have it in your local banks safety deposit box than do this. Youre not hiding anything from anyone by sending it off to another country. If youre not hiding it, why send it out of the country, unless its where you plan to retire?

I would love to hear any counterpoints, but please reconsider sending anything overseas, especially to the Swiss. They are no longer a safe haven (in 2009 UBS tunred over names of people accused of hiding assets in Swiss acounts), and really never were given what happened after the war.

 

Immolatus, you are right.

What some people fail to understand is that many of the companies who sell metals and store them for you do not actually have the metals. You will get a piece of paper saying they have stored your x amount of ounces of metal and will charge x amount for that useful task. Actually they have no metals at all. If you decide to take possession of your metal you have a certain amount of time before they will send it to you. Amount of time varies. During the time you do the paperwork and they time they have to send the metal they will buy the amount you have stored. They make their money from payments for storing something they do not have and take the gamble the price of metals will go down before you take posession and metals left after a person dies with no record of their metals.
They make an investment. Not quite as much of a gamble as many people might think. If SHTF you will loose any metals stored in such a place.

People who have experience in metals have a saying, "If you don't hold it you don't own it."

 

Peter Schiff recommends this kind of thing, storing your silver in foreign accounts, but that whole idea sketches me out. Im supposed to believe its safer for me to store my pms thousands of miles away, controlled by someone I have never met, and on top of it, I have to pay for the 'service', than to bury it in my backyard or whatever?
That makes no sense.
If SHTF, obviously you are SOL, and will not be seeing any of it.
You would now be officially trying to 'hide' assts from the gubt.
Obviously these kinds of transactions would be much easier to trace, as you are generating all kinds of paper trails.
As far as I know, the Swiss are no longer safe haven from the gubt, didnt they recently turn over accounts to the US?
I would think it would make more sense to have it in your local banks safety deposit box than do this. Youre not hiding anything from anyone by sending it off to another country. If youre not hiding it, why send it out of the country, unless its where you plan to retire?

I would love to hear any counterpoints, but please reconsider sending anything overseas, especially to the Swiss. They are no longer a safe haven (in 2009 UBS tunred over names of people accused of hiding assets in Swiss acounts), and really never were given what happened after the war.

I would hesitate about putting any valuables in a safety deposit box. If the banks go down so do your valuables and forget about FDIC, they don't have anywhere near enough to cover all individual accouts in the banks. (IMHO)

 

Peter Schiff recommends this kind of thing, storing your silver in foreign accounts, but that whole idea sketches me out. Im supposed to believe its safer for me to store my pms thousands of miles away, controlled by someone I have never met, and on top of it, I have to pay for the 'service', than to bury it in my backyard or whatever?
That makes no sense.
If SHTF, obviously you are SOL, and will not be seeing any of it.
You would now be officially trying to 'hide' assts from the gubt.
Obviously these kinds of transactions would be much easier to trace, as you are generating all kinds of paper trails.
As far as I know, the Swiss are no longer safe haven from the gubt, didnt they recently turn over accounts to the US?
I would think it would make more sense to have it in your local banks safety deposit box than do this. Youre not hiding anything from anyone by sending it off to another country. If youre not hiding it, why send it out of the country, unless its where you plan to retire?

I would love to hear any counterpoints, but please reconsider sending anything overseas, especially to the Swiss. They are no longer a safe haven (in 2009 UBS tunred over names of people accused of hiding assets in Swiss acounts), and really never were given what happened after the war.

One thing I like about Bullion Vault is that it will be a lot easier to sell some of the gold as the price goes up. How easy is it to resell gold and silver coins? Let's say I have 10 ounces of gold at $1500 an ounce. Once gold starts to take off it would be easy to sell $1000 worth of gold here and there as I need money.