I start a new job November 19. The new company has a 401k plan. My current 401k is at $5600. Would it be a good idea to cash it in and purchase gold and/or gold mining stocks? I want to diversify my investments. I do not currently own gold. What would my total taxes and penalties be if I withdraw?
The taxes and penalities would be heavy, works out to around 40% I think all told, depending on the type of account. There are gold based IRAs you can roll it into I believe, if that's what you want to do. That would allow you to keep the full amount, have a gold based IRA, and use your current company's 401k and match if they have one to build a second retirement account, which you can also roll over when the time comes, or do whatever else you'd like to do with it.
xahrx: The taxes and penalities would be heavy, works out to around 40% I think all told, depending on the type of account. There are gold based IRAs you can roll it into I believe, if that's what you want to do. That would allow you to keep the full amount, have a gold based IRA, and use your current company's 401k and match if they have one to build a second retirement account, which you can also roll over when the time comes, or do whatever else you'd like to do with it.
Ah. I don't know why I completely forgot about gold-backed IRAs. I think I'll do that. My current 401k is with Wells Fargo. What companies should I consider for the gold-backed IRA? Thanks.
Here is what I do:
1. Add the minimum to your 401K that will include a company match.
2. Open a Roth IRA some place and focus on miners and other commodities.-This is the dubious part as there is an ENORMOUS risk of government who authorized this CAN AT ANY TIME start taxing these accounts.
3. Takes whats left and buy gold and silver. Please be careful about paper gold and silver as there could be huge counter party risks and be careful about stroring gold or silver in the banking system.
Bogart: Here is what I do: 1. Add the minimum to your 401K that will include a company match. 2. Open a Roth IRA some place and focus on miners and other commodities.-This is the dubious part as there is an ENORMOUS risk of government who authorized this CAN AT ANY TIME start taxing these accounts. 3. Takes whats left and buy gold and silver. Please be careful about paper gold and silver as there could be huge counter party risks and be careful about stroring gold or silver in the banking system.
Yeah, I just realized that I would like to be in control of the gold rather than pay someone else to take care of it for me. I could only buy maybe two ounces so it's certainly manageable on my part. It would be nice to have gold in my possession should it hit the fan one day.
do what Bogart said with the new company 401k.
do what Bogart said and buy gold and silver with the rest of your savings.
if I recall correctly, storing physical gold in an ira or 401k is onerous and complicated. Obviously if this were true you would find out when you went to do it, so this isnt advice as much as conversation. I heard it sucks, dude.
Malachi:Cash in your current 401k and buy gold. do what Bogart said with the new company 401k. do what Bogart said and buy gold and silver with the rest of your savings. if I recall correctly, storing physical gold in an ira or 401k is onerous and complicated. Obviously if this were true you would find out when you went to do it, so this isnt advice as much as conversation. I heard it sucks, dude.
Yeah, I came to that decision. I'll just set aside 40% for potential taxes for next year. You have to find a boullion supplier and then arrange everything with the 401k or IRA provider.
Apparently, I can redirect my current Wells Fargo 401k balance. Any recommendations? I can adjust it by percentage.
Wells Fargo Adv MMarket Fund - Service (default fund) Wells Fargo Adv Total Ret Bond Fd - I Loomis Sayles Strategic Inc A Wells Fargo Adv Asset Alloc Fd Admin Oakmark Equity and Income Fund (II) T Rowe Price Retire 22 (R Class) T Rowe Price Retirement 23 (R Class) Davis New York Venture Fund (A) Wells Fargo Enhanced Stock Market Fund N Thornburg Value Fund (R3) Delafield Fund Inc ‡ Davis Opportunity A Thornburg Core Growth/R3 Aston/Tamro Small Cap/N Federated Kauf Sm Cap A Wells Fargo Adv Global Opp Fd - Admin EuroPacific Growth Fund (Class R-3) Wells Fargo Adv International Equity I Franklin Floating Rate Daily Access Adv Lord Abbett Short Duration Income A PIMCO Total Return Fund (Admin) Russell Emerging Markets E Harding Loevner Emerging Markets
I would not start a new 401k at all, and in fact I refused to open one myself. This may be dependent on your age, however. If you can retire in the next few years, it may be appropriate to at least get the company match. If you are 30 years old, though, I wouldn't open it at all. As has been eluded to previously, the government can and will change the rules on you before you turn 60. They will tax it, they will confiscate it and replace it with treasury bills, whatever...Just don't expect 30 years from now for things to be the same.
If you are going to cash your current 401k in, do all your research. There are a few instances you can cash them in without getting penalized. For example, payment of student loans or down payments on a first home, I think. Perhaps you could knock out a 5000 dollar student loan and then use the money you would have used to make monthly payments on that loan to buy silver. That would bypass the 40% hit.
Prime: I would not start a new 401k at all, and in fact I refused to open one myself. This may be dependent on your age, however. If you can retire in the next few years, it may be appropriate to at least get the company match. If you are 30 years old, though, I wouldn't open it at all. As has been eluded to previously, the government can and will change the rules on you before you turn 60. They will tax it, they will confiscate it and replace it with treasury bills, whatever...Just don't expect 30 years from now for things to be the same. If you are going to cash your current 401k in, do all your research. There are a few instances you can cash them in without getting penalized. For example, payment of student loans or down payments on a first home, I think. Perhaps you could knock out a 5000 dollar student loan and then use the money you would have used to make monthly payments on that loan to buy silver. That would bypass the 40% hit.
I'm 28. None of the penalty-free early withdrawal situations apply to me. If I cash in my 401k, I'll be paying 25% in fees and taxes. I would immediately buy gold with that. I don't think I shouldn't open a new 401k, especially if the company matches it. If I don't, how else should I plan for retirement? Are the Wells Fargo emerging market funds any good?
5600 is probably enough to consult a specialist on your options.
I was actually criticized by my older brother because I refused to open a 401k account (I am 23 years old). My reasons for this is because when I pointed out to him the savings would be inflated away in value. Also I pointed out about how 401ks were confiscated by the Govt in Argentina some years ago.
Nonetheless he continued to encourage me to open a 401k especially that "I'm young" and sucks his teeth at me in a very vexing manner when I point out my concerns for someone my age. Also, I would be wary around gold/silver stocks. As Doug Casey explains in his videos most minin companies are crappy and fail. Lol I have little experience around stocks but it's my experience so far that most don't actually produce the precious metals. I most cases this is because of Govt regulations and R&D related problems.
With $5600 you would not be able to buy hardly any physical Gold (could have back in like 2000). I would instead go for physical Silver, I am of course assuming you don't have the means to stockpile a significant amount of Gold, most people don't. Fortunately Silver is a viable alternative.
shackleford:I'm 28. None of the penalty-free early withdrawal situations apply to me. If I cash in my 401k, I'll be paying 25% in fees and taxes. I would immediately buy gold with that. I don't think I shouldn't open a new 401k, especially if the company matches it. If I don't, how else should I plan for retirement? Are the Wells Fargo emerging market funds any good? No one on an internet forum can know the specifics of your situation and offer specific advice. That would be reckless to do so. From my personal point of view, and I am 30 years old, it is not wise to lock up my money for 30 additional years. The reason I believe this is because I think with 100% certainty that the dollar will collapse before I turn 60. What does that mean for our 401k? Your guess is as good as mine. I don't think it will be pretty though, and for that reason, I value liquidity, immediate access to my money, to be a higher priority than a company match. How am I planning for retirement? First, I am paying off my student loans because those are non-discharable upon bankruptcy. I will owe the gov. for the rest of your life. Second, I have physical precious metals. You can also open an account at Scottrade and buy any stocks you want for $7. So you can still plan for retirement without a 401k. You are just sacrificing that company match for the security of liquidity. As for Wells Fargo funds, I have no idea. I would have to read the prospectus and see what is held in the fund. Emerging markets are extremely risky with the way global markets are now. | Post Points: 5
aiser - i would disagree with the last part. It really doesnt matter how much gold you have. you arent any wealthier holding 5600$ in silver over 5600$ in gold. the real question is what is the demand levels going to be and production possibility of the metals. I think the production of silver can grow a lot faster over the production of gold (i havent done anyresearch...so correct me if im wrong in assuming silver is a less scarce resource). therefore you will have higher returns with your gold investment simply from the inflation of silver hitting the market. Though i asked in my thread opinions on 'should someone invest in silver over gold'. but investing in silver simply because its 'sexier' to hold more ounces would be a wrong reason to invest.
A quick note on mining stocks. Remember, the reasons we expect for gold to increase in value, such as inflation or hyperinflation, are also reasons that cost mining companies more money to extract gold. What I'm saying is if we have hyper inflation, you can bet that the energy required to mine gold, the wages paid to labor, etc.. are also increasing. It may not be as profitable as some believe. Not saying it is bad by any means, but just because gold shoots up doesn't necessarily mean the mining companies will be as successful.