stop investing in 401k, Roth IRA????

solar1 · Coal Joined: May 04, 2005 Posts: 7

Since I am in my late 30s and won't be able to draw from any of these accounts until >2030, should I immediately STOP making investments into these accounts?

newbie1234 · Coal Joined: Mar 31, 2005 Posts: 14

i would like to know the answer to this as well

RonMN · Posted: Wed May 04, 2005 3:18 pm Post subject:

I hate to give financial advice...so i wont tell you what to do with your money...but i'll tell you what i did.

I stopped adding money to my roth IRA...and i lowered my contribution to my 401K (at work) to 1 percent (just so i could stay in the plan). This gives me more money right now & i haven't burned any bridges (i can always change things back the way they used to be).

You need to make your own descisions about your future.

MicroHydro · Light Sweet Crude Joined: Apr 10, 2005 Posts: 1286

Tyler_JC · Posted: Wed May 04, 2005 3:27 pm Post subject:

Considering the fact that I'm only in highschool, I don't think I'm going to bother with a 401k or Roth IRA. I'm rather bitter about the fact that I'm paying into Social Security knowing that I'm not going to get a damn penny out of it.

I don't see the stock market surviving PO. It's all about growth on Wall Street. Any company that stays flat for years is called a bad investment. A stock that falls year after year is a terrible investment. How is General Motors going to increase it's yearly revenue with a decline in net energy?? It's just not possible. I personally think anyone who won't be able to collect anything till past 2035 should bother with a retirement account.

Instead, pay off debt and buy useful tools. Land is also a nice investment. Physical silver and gold might also be nice (silver more so than gold, how do you buy a chicken with gold?).
_________________
"www.peakoil.com is the Myspace of the Apocalypse."

MaterialExcess · Posted: Wed May 04, 2005 3:40 pm Post subject:

I'm in my mid thirties and I continue to invest in my 401K and that money is all in stock funds. I think of this as a hedge just in case peak oil doesn't happen, doesn't happen in my lifetime, or doesn't result in a collaspe of the stock market. Preparing for the worst is good, but you should always consider the possibility that the worst might not happen.

solar1 · Coal Joined: May 04, 2005 Posts: 7

tax rates now are probably at the lowest that we will see them. taxes will HAVE to be raised in order to pay off the incredible debt that we have amassed. Couple that with the likelihood that the market is going to move sideways or downward for the next decade or so and maybe it is best to take the tax hit now and invest the money in real estate or gold/silver or solar panels for my house. Another issue is the fact that you cannot get at your money (without a significant penalty) in such accounts until retirement age, which for me, is a LONG way off.

Ludi · Posted: Wed May 04, 2005 4:38 pm Post subject:

Isn't the penalty on withdrawing IRA funds only 10%, plus income taxes?

cube · Fission Joined: Mar 12, 2005 Posts: 2927

I stopped contributing to 401k's because frankly I think there's no real future in them. But that's just my humble opinion. That and frankly I think it's coporate welfare and social engineering/ manipulation.

But getting back to 401k's I have a theory as to why the price of stocks are ridiculously overpriced right now. Basically the baby boomers have finally come to the realization that SS (social security) isn't going to save their rear ends. It used to be people in their 20's who'd joke about SS not being there when they get older. Considering where this country is heading right now if you're in your 40's you can consider yourself in the same boat. And if you're in your 50's cross your fingers and hope the US doesn't try to "liberate" another middle eastern nation. That's one reason why people are "investing" their money.

In theory a corporation should be able to survive without stock. The money generated from selling goods and services should be enough to pay their expenses and make a profit. Stock therefore is very good for having extra money to expand...in theory. Now ask yourself this question, "How many companies would be alive today if everybody stopped buying stock?"

EXACTLY. There is one other type of financial scheme that can only survive if people continue to feed it....a pyramid scheme. But anyways don't take my opinion as the bible truth...everybody needs to choose their own road in life for better or worse.

good luck Very Happy

basketballjones · Posted: Wed May 04, 2005 5:44 pm Post subject:

listen to this weeks 'the big picture' on the financial sense newshour.

Jim puplavav has a question via email in which he answers this very question -

http://www.netcastdaily.com/fsnewshour.htm it's the 3rd hour you want to get. Emails are at the end, but it certainly wouldn't hurt to listen to the whole thing since he talks about social security early on too.

van64 · Coal Joined: May 04, 2005 Posts: 1

You guys crack me up--totally. Let's examine this like the intelligent people behind us: those who will take your place in the 401-k and Roth IRA contributions line and take advantage of the depressed equity prices that your for-gone purchases are creating.

Since 1802, US stocks have returned an average of 8.5% annually. Year in and year out. Put that in your compound pipe and smoke it. This was 60 years before crude oil was even DISCOVERED and commercialized in PA, folks. Sure, there have been good years and bad years: wars and famine and global pestilence. Gold and silver do not come close to returning what stocks return; neither have bonds or treasuries or any other interest-bearing instrument. Land? Well, it's the closest at about 8% annually.

Let's examine the oil industry itself. The oil and gas industry earned a profit margin of 8.5% in the first quarter of 2005, according to the API. This compares to 9.2% profit margins in all other industries during the same period.

Want more? OK: I know you doomsters are a glutton for punishment so try this: For all of 2004, the oil and gas industry earned 7.0% versus 7.2% on all other industries. The computer industry had the highest profit percentage at 15.6%. The oil industry is just an industry like any other. Period. Alternatives will be found and assimilated in the due course of time; such as when whale oil for lighting lamps was replaced by kerosene was replaced by electricity generated from coal, then nuclear. You get the idea.

If you truly believe in peak oil, put your money where your mouth is and purchase oil and gas equities.

frankthetank · Posted: Wed May 04, 2005 6:13 pm Post subject:

I took my money out. I'm currently just letting my money go into a high yield (3.15apy) MMA. Its not great, but atleast its almost keeping up with inflation Smile

I'm still investigating other options (GOLD, OIL, etc)...I would like to buy some land, but damn they want a lot around here for it!

arretium · Posted: Wed May 04, 2005 6:24 pm Post subject:

Our savings plans really sucks. We can only invest our 401K in a limited number of mutual funds. All of them suck. All except for one is entirely based on U.S. assets. Hence, if you believe the U.S. market is screwed, not exactly a place you want to put your money in. To make matters worse, no commodities are allowed. There is one international fund, but get this..most of the stocks are European and Japan. And the top stocks held by the international fund? Yup, Honda. Toyota. Phillips. Nokia. Not exactly companies that will fair well post oil when people stop buying autos and cell phones.

We can't even LOWER our percentage invested. We are locked in at the same 5%. In other words, we throw away 5% of our income every month and there ain't a damn thing we can do about it.

RonMN · Posted: Wed May 04, 2005 6:25 pm Post subject:

Tyler...i been paying into soc. security for 20 friggin years and i wont see a penny out of it...don't gimme you're wining!

It sucks...yes! but there are more important things...like how to keep y'rself warm in the winter! Crying or Very sad

DantesPeak · Posted: Wed May 04, 2005 6:36 pm Post subject: