Is our money safe in our retirement accts, if we go into a recession?

Question

A lot of people I work with are talking about pulling their money out of their retirement accounts. They know of the penalties involved and are saying, we're heading for a recession, and that getting some of that money out....is better than losing it all. What do you think?

Answer 1

The best thing to do would be just reallocate the assets in the accounts, move into something safer, like a higher percentage of bonds, or diversify with overseas funds.

If you are years from retirement, there really is nothing to worry about - over the course of time, the stock market will outperform almost every other investment, so given time, losses today will become gains tomorrow.   By pulling out the funds, you would not only get hit with the penalties, but also you may mess up your retirement plans an dmiss the recovery when it came.

Answer 2

You can simply re-allocate the money into a stable value fund within the retirement account, which is a money market fund, to avoid the penalties and taxes for pulling out of the plan.

That is precisely what I have done.  I sold the mutual funds in my account a few weeks ago, it was really too painful to see it losing value day after day, and now I am close to 100% in money market and some bonds.

So, avoid pulling out any funds from your account if at all possible.  The penalties and taxes are really oppressive.

Answer 3

Stupid.  Don't even listen to them. They are making decisions based on fear. The media is making a lot of ratings for scaring people and exaggerating the facts.  The world is not going to end. We are going to be OK.  How many times have you seen the stock market and real estate go down?  America is smart and they will figure out a way to get back up. Usually when the stock market has lows it follows with historical highs.  Do not participate in mass fear.  Fear is a decision making tool that will always make you loose money.  Don't fall for it.

Answer 4

I don't know why they would withdraw the money from their retirement accounts.  They would be better off transferring the money within the account to a safer investment within the retirement account.

Answer 5

Don't touch your retirement money...if your afraid, move it into CD's.  I'd recommend keeping it in large company stocks that pay dividends and reinvest them or a similar fund.