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 Replies: 37 / Views: 4,638 |
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Valued Member
United States
477 Posts |
What do you guys think about 401Ks? To me it just doesn't make since to store large sums of USD under your bed. I have another 4 decades before I retire so the thought of storing large sums of USD for several decades doesn't seem a good idea. I think it's likely that the USD will collapse within this time, we'll have another 5-8 recessions, a depression could occur worse than the great depression, or hyperinflation could occur.
Perhaps if I was retireing in 10 years it would be a good idea, but I just don't see the point for young people to have a 401 K given that it's likely the dollar will collapse before we retire. I think it may be best to take the hit on the lost profit of your company matching a certain percentage, and taking the hit on taxes, to get as much money as you can ASAP and invest it in other assets besides just letting large sums of cash sit idle for a few decades.
So I was wondering what your guys thoughts on 401 Ks are? I believe letting gold sit for a couple of decades might be the better idea, and letting money sit idle for a few decades just seems like a no brainier silly.
I know that if you get fired from your job you can get your money in your 401K with drawn in one lump sum at no penalty? Is this true? I don't know maybe than it would be a good idea because it's unlikely that I'll have the same employer for the next 4 decades, at least I think.
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Valued Member
United States
368 Posts |
There is a greater chance of the Dow topping 30,000 than the US Dollar "collapsing". Taking that into account, your money is safer in a 401K where you should see steady 6-8% growth if invested wisely. The bullion market is much more risky...even though you could expect higher initial returns to begin with, you could easily see gold, platinum, and silver collapse just as easily.
I am 36 and am diversified about 80/20 between 401K and bullion.
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Valued Member
 United States
477 Posts |
Hmm... how mu h do you contribute? I think I can do max 50% it won't let me do more :(
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Pillar of the Community
United States
1068 Posts |
If you choose bullion over a 401k you are going to loose and loose badly...
Like Lowlife said, 401k's are much safer and less risky than bullion...
Also, It is smart for young people to begin investing in 401's as soon as possible and to put in as much as possible or at least put enough in to get your company's match... After all, they are giving you FREE MONEY, so take it and don't leave it on the table... Currently I am putting 8% in my 401k plus my company is putting in 4% so I have 12% going in weekly...
If you get fired from your job or quit you have two options, leave your 401 where its at (dumb idea) or do a rollover (which I have done before)... If you cash it in, you WILL take a 10% penalty plus taxes on it... So NEVER cash it in...
At my last job you use to have three choices for retirement... Stocks (my company was part of a larger corporation that traded publicly) 401k,or Bonds... I chose stocks as it had the bigger risks but bigger rewards...
When I left in August of 2001 I left it and after 9/11, the value went below $3000 so Fidelity cut my a check as it was worth less than it cost to manage it so I took the check to Edward Jones and asked them to "Help me, I don't want this money" That said have a seat and I opened a Traditional IRA and now that $3000 is worth 3x more than what I had invested...
Sadly I work with people who don't want to bother with their 401's even though they do contribute... The company I work for now just switched to Fidelity and I took paperwork up to my Edward Jones office and ask them where I should put my money... They gave me a plan and the second our "blackout period" ended I was on the phone moving my money around...
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Pillar of the Community
United States
1068 Posts |
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Hmm... how mu h do you contribute? I think I can do max 50% it won't let me do more :( If you could afford it... Put 50% in it... I can put 95% in mine... If I was married to a rich woman and could, I would... After I hit $18,000 for the year, it would stop contributing... |
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Pillar of the Community
United States
4085 Posts |
Bullion is a commodity that keeps pace with inflation, but in general, an ounce of gold will buy the same amount of goods in 50 years as it does today.
A 401(k) has the potential to grow beyond inflation because you can invest in stocks that will grow with the economy. On top of that, if your company is willing to kick in a match of 50%, you have that bonus plus you pay no taxes on the money as it compounds. Compound interest is a powerful thing and if you can start when you are young, you take maximum advantage of that.
A dollar you put in your 401k, matched 50%, compounded at 10% for 40 years is worth around $68. Even at 7%, it is worth $22.50. It adds up quick.
Let's say you put in $1000/yr for 40 years and your employer kicks in a $500 match. At 7% growth, that's worth $343,000 after 40 years. At 10%, it's worth $798,000. That's serious money.
I would put in whatever you need to get the company match. At my company, they match 50% of the first 6% of salary, so I put in 6% and they put in 3%. Start early, get that match and roll over your money (don't cash it out) when you leave jobs. That's key.
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Pillar of the Community
United States
2130 Posts |
Green print.....Please take the advice that has been given so far. You will be much better off with the 401k and compounding interest is your best friend. Please research 401ks more and learn everything you can about them. You will not regret it.
Park any extra money you may have in gold/silver. It's always fun to have a little stash to dabble in.
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Valued Member
United States
100 Posts |
I'd do 401k, as it's safer. Bullion is too unstable of a market, if silver, for example, drops like it did over the last few years (remember, back in 2012 silver was ~30/oz, now it's half that), one could lose a lot of money.
Edited by Hibernias
05/11/2016 9:52 pm
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Valued Member
United States
477 Posts |
Wait so you have a 18k limit on a Roth and traditional. However after tax 401k has a much higher limit 53,000 K a year but you pay tax on earnings when it's withdrawn.
So how do you know if you should do Roth or after tax 401K?
I think if you contribute much more significantly to your 401 K than than the Roth limit of 18 K it might be worth it? What are your thoughts on that?
Thanks for all the advice I'm learning lots.
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Valued Member
United States
477 Posts |
What if u never want to retire
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Pillar of the Community
United States
992 Posts |
Don't let your ego screw up your retirement and old age. You absolutely have to have a 401k or IRA. Shut the heck up and quit trying to talk yourself into being stupid. You need both the 401k and the IRA, the Roth is best IRA platform. Max out your 401k and the IRA, too, make it hurt and you're doing it right.
You also absolutely have to have some physical precious metals. Go right ahead and buy all you want with the money over and above your maximum 401k contributions, once you have a very good cash emergency fund as well, around 6 months of expenses.
Planning now on not retiring 40 years later is pretty stupid. Lots of young folks think they've come up with some great idea about retirement, most of it is complete crap. I've seen people try and use life insurance instead of a spousal annuity, then the insurance company doesn't pay because he was already sick. One guy tried that and in the divorce his wife got not only her share of his retirement but the life insurance policy, too. Trying to save $700 a month cost him $4000 a month. Dumb bunny. Some folks are just too smart for their own good. Don't be one of them, they're idiots, to be charitable. If they didn't have families to take care of, I'd just let them be idiots, but that's not possible.
Whether you want to retire or not, you're going to have to plan on it just like everyone else, or suffer the consequences of your own stupidity.
Not to berate you, but the woods are full of know-it-alls who think they know how to beat the system. Las Vegas was built with their money and Wall Street if full of billionaires who got rich off the knuckleheads that thought they didn't need to be careful with their life earnings.
Put your money in your 401k like it's all you will ever have. And save money in the bank like it's all you ever have. As a retired person, I can tell you, you aren't saving enough for your old age, 401k, bullion, Roth IRA, whatever. I was lucky, every nickel I tried to get smart with went away early on and kept me from throwing more money after bad. Lots of folks don't learn that until they need the money, and it's not only not there, but they need to retire whether it's there or not. Ramp it up and suck it up.
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Pillar of the Community
United States
4333 Posts |
Although I own bullion and have a 401K, my bullion pays no dividends yet my 401k has averaged a 15% return in 2016, and 10% over the last 10 years.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Pillar of the Community
United States
2543 Posts |
I lost my retirement gambling ..... I was betting I'd be dead by now.  You can do both, get a gold backed IRA or 401K, as part of a diversified retirement portfolio. |
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Bedrock of the Community
Australia
21788 Posts |
Is it possible to buy physical bullion within a 401K Plan?
A financial advisor once advised me that as a rule of thumb, an amount of around 5% of the total funds in bullion, within the retirement account would be reasonable.
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Pillar of the Community
United States
1068 Posts |
Quote:
Wait so you have a 18k limit on a Roth and traditional. However after tax 401k has a much higher limit 53,000 K a year but you pay tax on earnings when it's withdrawn.
So how do you know if you should do Roth or after tax 401K?
I think if you contribute much more significantly to your 401 K than than the Roth limit of 18 K it might be worth it? What are your thoughts on that?
Thanks for all the advice I'm learning lots. There is a limit on both my 401k ($18,000 max) and Roth IRA ($5,500 max, $6,500 after 50 years of age)... Roth is by law and I assuming the 401k is as well for tax reasons... The nice thing about a Roth is that it is contributed with after tax money where 401k and Traditional IRAs are with pre-taxed money... With a Roth you will never pay taxes on the money YOU contributed to it but only the money you made in it... for example: You put in a $1000... You make a $1000 on your investment you will only pay taxes on a $1000 instead of $2000 and that is at 15% for capital gains and not income taxes where the rate is between 15% to 39.6% depending on your income... As far as which one to do 401k or Roth, that's easy... BOTH... I have $100 taken out of my savings account once a month to buy a stock in my Roth that I sat up at Edward Jones... It was real easy to do, and they'll gladly help set one up if you want one... After a year or two switch to a different stock and start buying that one... It is called DCA: Dollar Cost Averaging and I have 7 pages of stocks to choose from... |
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Pillar of the Community
United States
1068 Posts |
Quote:
Is it possible to buy physical bullion within a 401K Plan?
A financial advisor once advised me that as a rule of thumb, an amount of around 5% of the total funds in bullion, within the retirement account would be reasonable. Not exactly... You cannot buy bullion with 401k money but you could buy futures contracts or ETF's (Exchanged-Traded Funds)... More info can be found here... http://usatoday30.usatoday.com/mone...ing401k-.htmYou can do a Precious Metal IRA but I wouldn't waste my time or money when you can just buy the actual stuff and actually have it in your possession... I asked my Financial Advisor about it and that is what he told me... Now with the fact you live in Australia you might have some different rules/laws but I highly doubt they are much different than ours in the States... |
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Replies: 37 / Views: 4,638 |
Posted 05/11/2016 8:11 pm
