So, how's everyone's 401K doing?

[HeroOfPellinor]

Originally posted by: DaveSimmons

Originally posted by: KK

Originally posted by: HeroOfPellinor


As for you, KK, go for it man. Give Warren Buffet another 20K and then come back here and bitch about how the rich get richer and the poor get poorer next year.

Theoretically, could I claim the 20k loss, therefore it would only be a 14k loss?

A regular 401k is funded with pre-tax money, reducing your tax bill each year.

AFAIK if you take the money out, you'll owe taxes on the 30K, with no 20K loss to claim since you already deducted all 50K from gross income earlier.

So keeping it in your 401k makes more sense.

I think he means shifting his 401K funds from stocks to bonds. If he was to take it out, between taxes and penalties he'd probably only end up with $15,000.

 

[scruffypup]

Originally posted by: HeroOfPellinor

Originally posted by: DaveSimmons

Originally posted by: KK

Originally posted by: HeroOfPellinor


As for you, KK, go for it man. Give Warren Buffet another 20K and then come back here and bitch about how the rich get richer and the poor get poorer next year.

Theoretically, could I claim the 20k loss, therefore it would only be a 14k loss?

A regular 401k is funded with pre-tax money, reducing your tax bill each year.

AFAIK if you take the money out, you'll owe taxes on the 30K, with no 20K loss to claim since you already deducted all 50K from gross income earlier.

So keeping it in your 401k makes more sense.

I think he means shifting his 401K funds from stocks to bonds. If he was to take it out, between taxes and penalties he'd probably only end up with $15,000.

The poster was confusing the loss you can take when you invest in stocks in a regular brokerage account, you cannot claim the losses in a 401K that way. If it was in a brokerage account you could claim part of the losses this year up to the limit allowed which is $3000 (unless married filing separately, then it is $1500) and carry over the rest to next year up to the limit allowed.

This is due to capital gains on stocks being taxed differently, with a 401k you can take a tax deferment and have it all treated as normal income when taken out (standard 401K), or not take a tax deferment and have none of it taxable if meeting certain criteria when taken out (roth 401K). Gains or losses are not relevant other than the amount of the 401K, tax treatment is the same regardless of gain or loss (with type of 401K kept in mind).

Also 401K accounts have IRS limitations on when you can take the money out. It is not available whenever you want like an IRA or brokerage account, it is when you leave employment with your employer, so that is basically a moot point right there for most people. You would also have penalties for early withdrawal if under 59.5 years of age, etc.

Those who need a tax break this year might be wise to take a look at selling a portion of a brokerage account to come up with a $3000 loss and lower taxes,... though each individual situation is different and do some research or get advice prior to jumping in on that first.

Keep in mind also, that some 401K accounts and IRAs have brokerage accounts inside of them. These also will not be eligible for the capital loss tax break as a normal brokerage account would be.

 

[GasX]

I just looked at my rollover IRA. I never invested my last rollover deposit. Yay for a 35% cash position!

 

[I Saw OJ]

Originally posted by: alkemyst
Pimping is always profitable.

Ya but it aint easy.

 

[IronWing]

I only look on Friday evenings.

 

[scruffypup]

Originally posted by: I Saw OJ

Originally posted by: alkemyst
Pimping is always profitable.

Ya but it aint easy.

Absolutely not in this economy!!!
Men have less disposable income to spend on my girls now,... sales are down, the girls are getting down, this economy has knocked them off their feet, they are practically down on their knees begging for work, I have had to lay some girls, off.

 

[Martin]

Brought a GIC at the beginning of the year. Will probably do the same next year as well.

 

[KingGheedora]

Originally posted by: DaveSimmons

:thumbsup: I just send a check off to my brokerage to make some stock index mutual fund / ETF purchases.

"Buy low, sell high."

Well the wiseness of buying more stocks now depends on the time frame for the market to climb back up to current levels doesn't it? Some people are claiming that we are now in a recession, and it looks like the markets are continuing to drop. So in the short term you are still losing, but it might take 2-5 years for you to just break even, and at that point is when you finally start making money. These are just arbitrary numbers for argument's sake. So in a case like that it would be smarter to put your money into something else for those 2-5 years right?

In other words, no one knows where the bottom is, it could be much lower than it is now. And if that's the case it could also take quite a bit of time for the market to recover even to today's levels (DOW of ~8.6K). So i don't think it's a foregone conclusion that now is a good time to buy. If you somehow knew the market would bounce back then yes. But if you are not willing to take risk it would be smarter to put money into something more stable, no?

I'm not telling, i'm more asking, because I'm new to investing.

 

[scruffypup]

Historically most recession periods last an average of 18 months, and have the biggest gains right after. Now that really means nothing other than if you are investing in a retirement account and have many years until retirement, to not panic as you are looking at the long term and dollar cost averaging is going to be better for you now that the price for shares have gone way down.

In a retirement account with that scenario, you don't want to look at dollar value right now as it is really meaningless to what it will be in 10+ years anyways,.... you want to look at number of shares and see that increase.

Timing the market is impossible to do consistently on a long term basis, yes sometimes you can time it right and sometimes you just get plain lucky, but I wouldn't bet on that, since you can get screwed just as hard as you can make a killing when trying to time the market.

 

[Whoozyerdaddy]

I have no 401k... I have cash in the bank. Right now I'm giggling.

 

[andylawcc]

update before the weekend?

 

[Noirish]

Damn big corps and govts!!!

F

 

[bignateyk]

Originally posted by: Whoozyerdaddy
I have no 401k... I have cash in the bank. Right now I'm giggling.

You don't have any kind of employer matching to a 401K?

I get almost a 10% match of my salary when I contribute 5% of my own money. Even if the economy goes to shit, i'm still better off having my money there than in a bank account collecting next to nothing. If know people who dont contribute to it and dont get any kind of matching, and it has always boggled my mind as to why they wouldn't contribute.

Assuming I contribute 10K of my own money, that means I get another 20K from my company. Even if I go down 50% on the year I am still better off than if I had just put the 10K in a savings account.

 

[43st]

01/01/2008 to 10/09/2008 is -5.1%

I moved 90% out in August of last year, but left 10% in stocks.. So YTD reflects the decline in that 10% amount.

 

[mykol1010]

401k YTD -5%
Personal Acct beating S&P500 by 90%

 

[dr150]

Originally posted by: AmpedSilence

Originally posted by: DisgruntledVirus

Originally posted by: AmpedSilence
401k(1) - -16%
401k(2) - -20%
IRA - -42%
trading account - -60%

Not doing so well right now...

Wow must suck to be you and be down 138%...

now you see why i was complaining yesterday about NetFlix charging an extra dollar!

Penny wise, pound foolish!

 

[Doodoo]

Originally posted by: bignateyk

Originally posted by: Whoozyerdaddy
I have no 401k... I have cash in the bank. Right now I'm giggling.

You don't have any kind of employer matching to a 401K?

I get almost a 10% match of my salary when I contribute 5% of my own money. Even if the economy goes to shit, i'm still better off having my money there than in a bank account collecting next to nothing. If know people who dont contribute to it and dont get any kind of matching, and it has always boggled my mind as to why they wouldn't contribute.

Assuming I contribute 10K of my own money, that means I get another 20K from my company. Even if I go down 50% on the year I am still better off than if I had just put the 10K in a savings account.

Either you have a kickass plan or your math is off....

 

[KK]

Originally posted by: scruffypup

Originally posted by: HeroOfPellinor

Originally posted by: DaveSimmons

Originally posted by: KK

Originally posted by: HeroOfPellinor


As for you, KK, go for it man. Give Warren Buffet another 20K and then come back here and bitch about how the rich get richer and the poor get poorer next year.

Theoretically, could I claim the 20k loss, therefore it would only be a 14k loss?

A regular 401k is funded with pre-tax money, reducing your tax bill each year.

AFAIK if you take the money out, you'll owe taxes on the 30K, with no 20K loss to claim since you already deducted all 50K from gross income earlier.

So keeping it in your 401k makes more sense.

I think he means shifting his 401K funds from stocks to bonds. If he was to take it out, between taxes and penalties he'd probably only end up with $15,000.

The poster was confusing the loss you can take when you invest in stocks in a regular brokerage account, you cannot claim the losses in a 401K that way. If it was in a brokerage account you could claim part of the losses this year up to the limit allowed which is $3000 (unless married filing separately, then it is $1500) and carry over the rest to next year up to the limit allowed.

This is due to capital gains on stocks being taxed differently, with a 401k you can take a tax deferment and have it all treated as normal income when taken out (standard 401K), or not take a tax deferment and have none of it taxable if meeting certain criteria when taken out (roth 401K). Gains or losses are not relevant other than the amount of the 401K, tax treatment is the same regardless of gain or loss (with type of 401K kept in mind).

Also 401K accounts have IRS limitations on when you can take the money out. It is not available whenever you want like an IRA or brokerage account, it is when you leave employment with your employer, so that is basically a moot point right there for most people. You would also have penalties for early withdrawal if under 59.5 years of age, etc.

Those who need a tax break this year might be wise to take a look at selling a portion of a brokerage account to come up with a $3000 loss and lower taxes,... though each individual situation is different and do some research or get advice prior to jumping in on that first.

Keep in mind also, that some 401K accounts and IRAs have brokerage accounts inside of them. These also will not be eligible for the capital loss tax break as a normal brokerage account would be.

So you are saying if I had put in 100k into my 401k, and it went down to 5k, I couldn't claim any losses if I took it out?

Oh, and I'm not actually that bad off, just 40% down.

 

[IronWing]

Originally posted by: ironwing
I only look on Friday evenings.

Okay. it's Friday evening.

 

[Red Squirrel]

I just made 600 bucks with a few clicks, just now. Our dollar dived, so I transfered most of my US funds to my account. My wild guess as to the next few months is that the dollar will fluctuate a lot, so I'll be keeping an eye out so I can play with this more. I'm also going to go see a financial advisor about further investing.

With all this, maybe the houses will finally drop, though the interest will probably skyrocket...

 

[bignateyk]

Originally posted by: Doodoo

Originally posted by: bignateyk

Originally posted by: Whoozyerdaddy
I have no 401k... I have cash in the bank. Right now I'm giggling.

You don't have any kind of employer matching to a 401K?

I get almost a 10% match of my salary when I contribute 5% of my own money. Even if the economy goes to shit, i'm still better off having my money there than in a bank account collecting next to nothing. If know people who dont contribute to it and dont get any kind of matching, and it has always boggled my mind as to why they wouldn't contribute.

Assuming I contribute 10K of my own money, that means I get another 20K from my company. Even if I go down 50% on the year I am still better off than if I had just put the 10K in a savings account.

Either you have a kickass plan or your math is off....

For the matching? I contribute 5% of my salary, and my employer contributes 9.8% of my salary. It's a pretty nice deal. The 10K and 20K were just arbitrary relative numbers.