Can I put my entire 401k into cash right now?
Answers
192 points
seyobnats answered 10 months ago …
Of course you can but why? You would certainly be a fool to withdraw the cash, however, unless you are unemployed , getting a divorce, or have an immediate overwhelming need for it. The tax penalties are too great!
There are many good solid investments out there for the long term investor (and that is the purpose of your 401-k not to provide a source of funds to day-trade.).. Many of the S&P 500 stocks are good as the entire NYSE is on SALE at 30-50 % or more off since last October.
Many people forget the purpose of a 401-k account. There are no pensions being given anymore and if you are young, Social security may be insolvent by the time you reach retirement age.If you have a 401-k where your employer matches some or all of your contributions say "hallelujah!" as such employers are becoming increasingly scarce. If you withdraw some or all of your contributions some plans require the employer to withdraw his matching funds too.
So, be very carefful about withdrawing any cash from a 401-k.
2775 points
Oldman answered 10 months ago …
I agree with seynobats' ans. When the market tanked back in the winter of 2007-2008, that was the time to go to all cash, and wait.
If you want to redirect future additions and employer matches to a cash account, that's good at any time.
To follow a conservative, trend-following newsletter (which is mostly in cash now), look at Ulli's site, where the registration is free,:
http://www.Succesful-Investment.com
He ranks what types of 403(b) 401K funds and ETFs are generally available, vs the broader market indices.
2082 points
alanj answered 10 months ago …
I concur with Oldman. In fact I am a subscriber of Ulli's newsletter. It is excellent. He also runs a blog which you may also find useful. Here it is. http://thewallstreetbully.blogspot.com/
Read more from alanj678 points
BoxCar answered 10 months ago …
A readers question on "making losses permanent" was addressed in blogsite
http://www.thewallstreetbully.blogspot.com that alanj mentions. Go to Jan26 post
Recommends splitting remainder 50/50 cash/stocks with a 5% sell stop underneath
and explains how you might sleep better knowing you have a plan implemented
904 points
jillybeansisme answered 10 months ago …
Market101 did not say he wanted to withdraw the funds to put them in cash. While I agree that it is quite late to now make the change from whatever it is invested in to cash, the market is still volatile and expected to be for the next several quarters. If he leaves it in the 401K, but puts it into the money market temporarily that all 401Ks offer, it isn't the worst idea. This way he can judge what fund his 401K has that seems to be on the road of recovery and invest in that one. That being said, Market101 needs to know how often he can change his 401K investment elections before doing anything. Some 401Ks limit the number of changes that can be made.
If Market101 has, for whatever reason, terminated his employment with the Company, then he should do a direct rollover to a self-directed IRA. At that point, he should not invest in "cash" or the money market because there are too many great values in the market at this time.
This is my humble opinion.
