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.
You should regularly invest in broad-market index funds and not pay attention to the news (as far as your investing goes).
Upon the news I did check my VOO, most would agree an aggressive broad market pick, it’s 511 a share. I bought 3 or 4 years ago in the 350s. And regularly put in. What stock market slump? Just wish I had more money to buy that dip.
My recommendation? Watch less news and don’t check your investments when you hear bad news.
Buy the dip now, sure. But this isn’t the dip, it’s a Continental shelf and you’re about to lose a fuck ton of money.
No. Unless you had a ton of money in the account and you were already very close to retirement it just wouldn’t make sense. There are a lot of penalties when you pull an account early. I made a hardship withdrawal back in 2023 to make the down payment on my first home and that made sense for me, but even that type of thing isn’t right for everyone.
Your 401k will rebound eventually, retirement investment requires you to play the long game. If things get bad enough that your 401k is wiped out entirely then it really won’t matter whether or not you pulled the money out because it would likely be worthless in that situation.
It may be wise to change your elections so that the investments are less aggressive/volatile if you have that option, but otherwise try not to think about the total dollar amount as the economy shits the bed. It’s not like a bank account where the dollars equal dollars directly, the value of the investments can change quickly.
Do what this guy said, It’s good advice.
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?
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.
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.
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.
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.
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.
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.
if you do that, the risk is that you miss out on buying at low share prices during the slump, which will be the lots that show the highest return when the market heads back toward normal.
The periods of fastest gains are usually immediately following a downturn, so selling your holdings when you hear bad news about the stock market going down, is exactly the wrong thing to do.
If you believe that The Trump administration policies represent a foundational destabilization of the American economy, which is a reasonable take, you might make the choice to diversify into more international 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.
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.
Kind of a similar-ish question. I recently moved my 401k from an old employer to my personal account. All my money is now sitting uninvested. As much as I’d love to hire someone to look over my accounts, I can’t really justify that at the moment. In the most basic way possible, can anyone suggest specific indexes, stocks, whatever the terminology is that I should or could invest my money into?
There should be a target date fund, do that. It automatically rebalances as you reach your target date. So if you plan to retire in 2050, pick the 2050 fund.
Omg thank you sooo much!! This is exactly the simple and straightforward investment I needed! I also found a few other funds/growth symbols that seemed easy to understand. I’d eventually like to educate myself more on this whole topic, but right now simple is all my brain can handle 🤭
In addition to the target date funds, there are some very basic funds through every broker. Some big ones like SPX and QQQ track directly with the s&p and NASDAQ. Every etf will have a theme (tech, biotech, industrial, energy, etc.) And should have a short description on them. Find something that fits your fancy if you have an industry you really believe in
Yes yes! Thank you! When I was looking into Fidelity’s target funds I found ones labeled as mutual funds that sound super similar to what you described. I looked through the different industries and put some money towards those! I also just read into the difference between the two and will definitely be researching some ETF to invest into.
Not an American, but basically decide how much risk you want to take on - then depending on that answer set aside money (0-40%) for safe investments - things like bonds (guaranteed returns) or potentially gold (lower volatility). The rest goes into a 80/20 (or 60/40, or 90/10, no one can say what’s best) split between domestic and international index funds. Things like the S&P500, Dow, and US whole market index, and then some into EU, Asia/Oceana, and emerging market index funds.
ETF or 401k personal fund. Don’t let it sit. Hell, even a high interest savings like Vio bank. 4.25-5.25% interest.
