Calling all GI's: Your opinion about retirement funds?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I've got money for retirement in an annuity which comes due in 2005. Retirement is 20 years in the future. I'm trying to decide whether to leave it in and let it ride out the recession I believe is coming, or to pay the penalties and take it out. Will be calling my broker this week but don't want her spin only. Any suggestions? What are some of you doing?? If you convert it to cash do you really do CASH or put it in a savings account, etc. Do you think the market will take a big hit?
-- Jill D. (email@example.com), June 20, 1999
Personally, I'd want all of my financial assets in an extremely liquid state. With what may be coming, I'd want all the options I could arrange. Your Broker is going to counsel you to leave your money right where it is. "You're in this for the long haul...blah,blah, blah". Twenty years is a long time. You could be run over by a truck tomorrow. And Y2K is coming. If nothing happens, or we have a " Y2K winter storm" nothing except the penalty will be lost. If there is a moderate to severe depression, you might need the cash-and the "XYZ Fund" might not survive. If there is a lengthy depression, rioting, shortages, war and chaos with resultant government repression/martial law, even 90 day T-Bills might not be safe. But, it's also probable that, if you have liquid assets-in a safe form, once the dust settles, there could be stupendous buying opportunities.
-- Greg Lawrence (firstname.lastname@example.org), June 20, 1999.
It took the stock market until 1956 to return to the level of the 1929 peak. And that does not solve the problem of bad data, lost data, bankruptcies, etc. Think about being in 1929 before the crash and being GI, what would you have done then, if you knew? I agree on point made about liquidity. This situation is historic, unprecedented and unpredictable. There are probably not going to be any perfect decisions, just better, worser and worst, IMHO.
-- leslie (***@***.net), June 20, 1999.
I took out a loan from my pension fund. The interest is paid back to the Bank of Mikey, and the roof adds value to the place. I call my home Dry Heaves (thanks to a long-ago GN newsletter).
-- Mr. Mike (email@example.com), June 20, 1999.
I've kissed my retirement goodbye. I won't live that long anyway.
If I was of retirement age, I'd cash out before the stock market crashes.
-- Randolph (firstname.lastname@example.org), June 20, 1999.
Depending on what type of retirement plan you have you might be able to invest in gold bullion coins, other plans can invest only in American Eagles (which cost more for the same amount of gold than Kruggerrands). Gold is at an all time low due to the jaw boning attacks on gold by the central banks. If you stay in paper investments diversity and liquidity are more important than return at this moment. Only invest in things that will let you sleep at night. If you don't understand a particular type of invest, don't buy it until you understand it. Remember, the return of your money is more important than the return on your money.
-- Ken Seger (email@example.com), June 20, 1999.
Since there is nothing at all that might be really helpful, including gold, which has no real value, either, then do what you think it best and forget it. I mean, I am moving my 401k that is in stock into treasuries. But will that help? What will stand after this whole thing is through? No one knows.
-- Mara Wayne (MaraWayne@aol.com), June 20, 1999.
Wake up! If you have cash you will beable to get a lot of supplies that in turn will save your life, not many are getting ready, so you will be able to get preps in a last minit rush. You will see the panic and know when to make you move. But some of us have been preparing and are mostly ready, except for the shock of it.
-- Freak (Balls@wakeup.now), June 20, 1999.
Since your money is in an annuity, I assume that it is placed with an Insurance (or similar company) at a fixed rate. If it is variable, it shouldn't lose money...always assuming the insurance company or whatever stays solvent.
By 2005, everything should be sorted out...and you could roll it over to your choice of investment...
In my own case, the money is in a 401K, with sparse options. The bond fund is probably the best of a bunch of bad options if the excretia hits the rotating air handler (tehtrah). Severe penalties for pullout (about 50%)...so if any value is left, it may be better to stay in. Retirement is 12 years off for me, so I may make it...
-- Mad Monk (firstname.lastname@example.org), June 20, 1999.
For IRA's, one can open a self-directed IRA trust at a bank....look for a local bank that is limited to your county or state, strong reserve ratio, preferably that is shareholder owned by a trust or local charity, college etc. so it can't be bought out.
In a self-directed trust one can specify investments in treasuries, specific real estate (like giving a mortgage to your church for land), regular deposits up to the 100000 limit of FDIC insurance, etc. After rollover, have the bank invest as you see fit and to meet conditions then. This way you can transfer all those IRA Stock funds into liquid funds and invest more conservatively.
-- seraphima (email@example.com), June 20, 1999.
Do some homework in the archives, I have posted extensively on this. Mad Monk is wrong, dDecker is wrong, you will not have tpo pay 50% in tax and penalties. E-mail me privately for details. Good luck. Look for threads on retirement, 401k, early, etc. in banking, unvat and general.
There is a wealth of good advice.
Above all read the Gold thread I posted yesterday, it goes into all manner of scenarios, not least of which is y2k.
-- Andy (2000EOD@prodigy.net), June 20, 1999.
Before you make your decision, you might want to read this article:
Here is an excerpt from the beginning of the article:
"We may be staring into the face of a 12-24 month recession and a much longer time period for the stock market to recover. This means the stock market decline could be larger than the average 45% for a recession, and easily take 4-5 years to recover to new highs."
"What are the odds that we will see conditions like this? I believe that there is at least a 50-50 chance that we will see a more severe recession, with the stock market dropping to less than half of what it is at its height."
I know nothing about the author, but it does make for interesting reading.
-- LP (firstname.lastname@example.org), June 21, 1999.