I keep up with most of the dumpster fire that is current US news but I’m sorta lost on this one. I contribute to my 401k every week and have a few thousand saved up, as well as stock in the company I work for. Is all of the bad news referring to the stock market crashing? Is this general across the board or more company-specific? I consider myself decently politically educated but not so much economically.
This is the best time to invest in the S&P 500. When the economy eventually recovers, you’ll have massive growth.
And if the economy never recovers, we’ll all be speaking Russian or Chinese, so it won’t matter anyway.
Is your employer matching some percentage of what you add to your 401k?
All I have to add is be careful investing in a Roth if you plan to leave the US. Some countries don’t acknowledge it as a retirement vessel and tldr it’s a pretty bad investment if that’s the case
Tithe to yourself either before or after taxes, the church set 10% for a reason, that is the fluff that you can give before it starts to bother.
Always maximize your matches.
If you are in a lower tax bracket now then you would be when you retire, put it into a roth. If a high bracket today then tomorrow, put it into a traditional.
High risk when you’re younger. You can try to time market ups and downs, but unless you leg back in after you’ve pulled out, you are VERY likely to miss the upswings.
If you have enough to personally invest, either swing for the fences with 0dte or invest in products you use. You probably aren’t wrong.
And remember that that first option win is free. Post your loss porn to wsb.
If you are in a lower tax bracket now then you would be when you retire, put it into a roth. If a high bracket today then tomorrow, put it into a traditional.
I have only just heard this for the first time and it is interesting to me, what is the reasoning for this? I’ve been following the pattern of max out 401k match -> max out roth -> send extra to 401k, but I don’t really follow the intuition behind either strategy.
Reflect on what each tool does. They soak up today dollars to be spent tommorow. Delayed consumption for future benefit assuming your investments are fruitful and inflation doesn’t outpace your gains.
So A) do you want to lock up your money until you are at retirement age? What consumption are you sacrificing today for the benefit tomorrow? What investments are you displacing by these stock only options.
B) when you pull money out of the traditional, it counts as income and will be taxed. Part of retirement is managing your income streams to take out as much as you need/want with as little tax impact as possible. Some retirees get social security and even though they have bank, they don’t pull much from their savings.
Is it a significant impact, probably not. But it is a future risk to delay the tax. Who knows what the tax code will be? I mean, look at how the taxes are proposed to change next year. If you have an income of less than like 360k, your taxes will increase. How many retirees are pulling more than 360k per year? They just got future fucked on their tax deferment.
In an ordinary recession, you should definitely keep buying because stocks are basically “on sale.”
In this recession caused by sovereign risk (i.e. the government itself fucking up), it’s possible that the market might never come back. If you believe that’s likely-- or if you just want to boycott US investment to protest against the fuckery – you should still keep contributing to your 401k, but invest it in international ex-US funds.
You can probably elect to invest your 401k into stable funds.
Of course that doesn’t protect you from inflation.
You still might be able to choose a precious metals fund or something that might outperform inflation.
No. However if you’re the type of person to ask in this question, you should be invested in a target date fund. As part of the way they attempt to hedge for retirement, the include exposure to international funds and bonds.
How long until you retire? If you’ve still got another thirty to forty years of wage slavery ahead of you then don’t worry about it. Just keep contributing and make sure to get all of your employer’s match, if any.
I always buy stocks at their lowest and sell at their highest. Haven’t lost money with that method yet.
Yoy can’t argue with this logic /s
The reverse, probably: You should probably increase your contribution.
Consider the state of the market “now”. Consider the state of the market “later”, meaning some hypothetical time between now and your eventual retirement.
If the market is low “now”, and you think it will be high “later”, you should be buying now.
So, from an investing standpoint, there’s really only two things that can happen. Either the market will recover, and continue steady growth, at which point you’ll definitely be mad if you pulled out completely. The alternative is the collapse of the Western hegemony, at which point you’ll have much bigger problems than your 401k account.
this is pretty much it. if it all collapses it won’t matter.
The best time to buy is when everyone else is losing their ass. This is the best time to buy, unless it isnt and the entire market dies.
I remember 2009-2010. It was much worse than this right now. The trick is keeping your job in this market.
This 100%. The other comments addressed the “should I withdraw?” aspect of OP’s question, but this comment deals with “should I stop contributing?”. The answer to the latter is: no.
The mantra in investing has always been “buy low, sell high”. If the stock market is down, continuing your 401k contributions is doing the “buy low” part.
Appreciate it.
If I was the one doing the buying and selling, I would definitely be doing sell low buy high lol.
I was lucky and lost some minor $$ in bitcoin back in the day. Now I just put it all on automatic. Index funds with monthly/biweekly deposits are the best for me and mine.
Does your employer offer you a match on your 401k contributions? That’s free money regardless of how the 401k is invested so you definitely want to keep that going.
Even without that generally speaking you’ll still want to continue contributing to your 401k. Remember that a 401k is long term retirement savings, the market will continue to rise/fall during your employment over the next x years. You’re not required to invest 100% in U.S. specific index funds, in fact most people would recommend allocating a mix of U.S. / International / Bonds e.g. the “lazy” portfolio is one of the more famous recommendations https://www.bogleheads.org/wiki/Asset_allocation
Or for just set-and-forget you can invest in target date retirement index funds if your 401k offers them (most 401k plans offer those nowadays).
Are you going to retire in the next four years? Or take all your cash out into gold, quit your job, and go into hiding for the next four years?
If neither apply to you, you can leave your money in your 401k. Selling index funds right now is ultimately up to you, but in the long term time in the market tends to beat timing the market.
What I’ve read in books is: Building up savings itself is more important than whether the returns are +10% or -10%, early in your career, since it will fluctuate but tends to average up.
And remember if your national index funds, bonds or whatever market and government backed investments lose half its value, you have bigger problems on your hand of the state of your country at that point which having cash on hand may or may not help anyway.
The market goes through boom/bust cycles. This particular bust cycle is being precipitated by shitty political policies. You should be studying the prospectus for the stocks/products you are buying through your 401K. The prospectus tells you what company stocks make up the investment product, and will show you the long term performance. If you’re worried about US markets, you can move your some of your holdings into European/Asian stock products for a bit more diversity. In terms of risk, the stock market is riskier than the bond market, however bonds tend to preserve the purchase value over time rather than generate profit. The higher the risk, the higher the reward. What I have done is take my dividends/profits out of the stock side of the market, and use them to purchase bonds. This way I preserve the profit, and the original investment used to generate the profit stays in the risky part of the market to hopefully keep generating profit. Since the market is taking a big hit right now, now would be the time to buy, while the prices are lower, understanding that you are betting on a recovery which might not happen. Any financial advisor worth their salt would at the very least tell you to diversify your porfolio, as in don’t put all of your eggs in one basket. I would take this a step further to say, you should build up a savings account and not count on something risky like the stock market to be there for you when you retire. The stock market is just gambling.
