Topic: What are you doing with your 401(k) or IRA?

[Glock32]

Of all the things we know are looming on the horizon, one I find myself mulling over very often is the subject of retirement investments. Not for me, I cashed out my smallish 401(k) already, but I am thinking about my parents. They will be at retirement age very soon, so for them the stakes are much higher. I do not trust any sort of financial instrument. It's now beyond the normal market risk, it's to the point that they're just literally stealing from people. So I want them to get their retirement investments out, but the big question is "and do what with it?" The whole idea of it was so they'd have something to live off in their retirement, but we're at a point where you can't trust stocks, you can't trust bonds, you can't trust cash. Maybe just keep a suitcase full of gold coins under the bed like Pippi Longstocking?

So what are you doing with your own retirement accounts?

[AmericanPatriot]

I lost them in a horrible boating accident.

Wrong question.
Actually, I only had small amounts due to losses in some ventures.
However, I'm paying off debt and buying assets for a SHTF scenario

[Weisshaupt]

My personal "retirement" plan is to live with my children when I become too old to fend for myself. Retirement and living alone as a grandpa didn't exist 100 years ago, and its  going to cease to  exist after the collapse. I would personally try to convince your parents to move in with you, and if space is not available, use their retirement funds to buy a new place or expand your present one to accommodate them . You just need to assume that this country will fall to and stay at 3rd world levels (or possibly below) for at least a decade. In the 3rd world, parents live with their children - sometimes all of them, and their families,  because its the parents that own the home.

Wealth can only be "preserved" at this point in hard assets - and the value of those assets is going to change dramatically. Your parents will NOT live off their accumulated wealth, for all forms of wealth are as risk now, and after the collapse, without  the meaningful rule of law to protect your property,  the things you own are the things you can protect.  Real Estate - both demographically and economically is going to become cheap- in large part because no one will be able to evict squatters - there will be too many and not enough resources to remove them .. and Socialist feel "housing is a right" so rentals are not likely to be lucrative.  There will be no credit, so buying and selling Real Estate will be near impossible.  Meanwhile, toothpaste and toothbrushes will probably become high dollar items, as they are in other 3rd world nations. But a Warehouse full of toothbrushes is only valuable so long as you can protect the warehouse. A toothbrush factory then?  No , because businesses and risk takers will be penalized, and directive 10-289 will be in effect.  If your parents  have the wealth to pay to play,  then yeah, you can become a crony and do well. If not,  you efforts need to be concentrated elsewhere

It will probably be difficult to convince them, but your parents must be made to understand that "rich" in the 3rd world means being able to provide for your basic needs. Fuel, power, food, water, clothes. Living as you do now is "preservation" of your wealth

 My "retirement" plan is to rely on my children to take care of me in my old age when I can no longer fend for myself, and quite frankly that needs to be your parent's plan as well.  Their wealth  will be far better "preserved" buying a place (or expanding a current)  that would allow them to live with you  (and possibly your siblings)  in comfort.  Its is better spent on a PV Solar system that keeps your fridge/freezer  running and your food cold when the local power utility goes out ( which it often does in the 3rd world)  It is better spent on land with a well and septic that can be farmed and grazed to provide food, and on a greenhouse to provide aquaponics for fish and a food supply not exposed to the elements. It is better spent on dried food for when other sources fail, and a water filter to ensure water is always available.  Its better spent on  bullets, guns, and armor (knife and bullet resistant)  for that trips you need to make for supplies and for protection while working your land.  You need useful things that will add to your quality of life. Tools. Building Materials. Tractors. An Alcohol Still. Beer making supplies. A home Bio Diesel plant (only $8000)  The more of your basic needs you can provide for without resorting to trade, the "wealthier" you will be. Any extra goods produced for basic needs will be easily traded to provide cash . A gallon of diesel for a toothbrush is a much better transaction if you can make the diesel yourself.  There will be all sorts of niches in the "new economy" - but the point is the economy, and the value of the products produced within,  will be new, and pretty much unrelated to the old one.

Gold and silver will be unreliable sources of wealth. They are speculative plays.  If gold or silver become accepted and currency, the buying power of those items will appreciate dramatically. However if SDRs or other "new money" are introduced by TPTB, expect gold and silver to be confiscated or at least made illegal for trade ( silver is used industrially, so its the more difficult to do this with)  forcing you to the black market where it may be worth less in purchasing power than it is now.  Yes, you should have some, but it will probably only be really useful for barter in the months following the collapse. Stocks will follow the inflation for a while, but they will not make you money ( beyond the fake dollars you need to pay off your house loan - loans are a form of shorting the dollar, and its probably the best speculative play out there- providing you continue to have income that paces inflation)
 
Your parents need to understand that they will not be spending their golden years traveling the world, seeing the wonders of nature, eating at 4 star restaurants and sipping $100 bottles of wine, or sitting on white sand beaches dipping their toes in the water with  colorful drinks topped with  little umbrellas. They will spend it helping to do chores around the house with family, and playing games with grandchildren.  Life isn't fair, but it is what it is. Adapt or don't.

[IronDioPriest]

Your parents need to understand that they will not be spending their golden years traveling the world, seeing the wonders of nature, eating at 4 star restaurants and sipping $100 bottles of wine, or sitting on white sand beaches dipping their toes in the water with  colorful drinks topped with  little umbrellas. They will spend it helping to do chores around the house with family, and playing games with grandchildren.  Life isn't fair, but it is what it is. Adapt or don't.

They already are doing those things, enjoying their retirement. Not a chance in hell I'm going to suggest taking that away from them. If it all comes crashing down tomorrow, we'll deal with it then. Until then, my mother and father will enjoy whatever pleasures his long life of hard work earned them.

He's not stupid, and sees much of what's going on. But if acting on denial buys him one more day of all the days he looked forward to as the provider for our family, then so be it. He did his duty. He earned however many "one more days" the good Lord has in store for him and my mother.

[Alphabet Soup]

He earned however many "one more days" the good Lord has in store for him and my mother.

Amen.

I'm going to die old and alone. It wasn't my first choice but rather the result of poor choices and poorer luck. So be it. What I am truly thankful for was that my parents were able to enjoy their elder years. As much as possible us boys (the daughter not so much) lavished attention on them and made it possible for them to be as carefree as humanly possible. My only regret is that we couldn't make it last longer.

I may or may not have a pension, a 401k and SS 

I am hopeless inept to administer them. It will be what it will be.

I hope to die quietly in my sleep like my grandpa and not kicking and screaming like the passengers in the car he was driving....

[ChrstnHsbndFthr]

If we had a "like" button I would have clicked this one.

Your parents need to understand that they will not be spending their golden years traveling the world, seeing the wonders of nature, eating at 4 star restaurants and sipping $100 bottles of wine, or sitting on white sand beaches dipping their toes in the water with  colorful drinks topped with  little umbrellas. They will spend it helping to do chores around the house with family, and playing games with grandchildren.  Life isn't fair, but it is what it is. Adapt or don't.

They already are doing those things, enjoying their retirement. Not a chance in hell I'm going to suggest taking that away from them. If it all comes crashing down tomorrow, we'll deal with it then. Until then, my mother and father will enjoy whatever pleasures his long life of hard work earned them.

He's not stupid, and sees much of what's going on. But if acting on denial buys him one more day of all the days he looked forward to as the provider for our family, then so be it. He did his duty. He earned however many "one more days" the good Lord has in store for him and my mother.

[Weisshaupt]

They already are doing those things, enjoying their retirement. Not a chance in hell I'm going to suggest taking that away from them. If it all comes crashing down tomorrow, we'll deal with it then. Until then, my mother and father will enjoy whatever pleasures his long life of hard work earned them.

He's not stupid, and sees much of what's going on. But if acting on denial buys him one more day of all the days he looked forward to as the provider for our family, then so be it. He did his duty. He earned however many "one more days" the good Lord has in store for him and my mother.

I am spending my retirement money now to protect my children. To buy them more good days than bad. Ignorance is bliss, but  denial will  be costly. It sounds like Glock's parents aren't yet "retired"  and yours are IDP, but bottom line, if I was looking at my Children's children, instead of my own,  I couldn't say I would be making any other decisions.  I couldn't spend my wealth on that last chance to see when I know that my children and grandchildren not only never have that the chance to retire, to see Europe, to have exotic foods, or to dip their toes in turquoise lagoons,   but stand to loose food, clothing, and shelter because of my extravagance. I don't think my duty to my kids or their children  ceases at a certain age.

Perhaps its because my parents divorced. Perhaps its because they are both liberals  who voted to do this to me and my family. Perhaps its because they rarely made  choices that  put their children (or grandchildren)  over their own needs, and if they did it was because it served their ego and pride. Perhaps it is because they failed in their duty that I am determined to do mine. I have no help coming from my parents,  and they shall receive none when the inevitable happens.  Perhaps your situation allows this, and your love for your parents motivates you to want this for them, and that is admirable. I wish I cared for my parents half that much.

[Glock32]

I appreciate all the perspectives. I figure this is a question that everyone has to ask themselves, but is especially relevant for people who are about to be retired. We have the advantage of realizing just how corrupt and criminal the whole racket is while still fairly young. People like my parents on the other hand spent their lives saving and investing in what they thought was a system governed by rule of law and I doubt it occurred to very many people that we would one day have a government deliberately trying to wreck the economy.

My dad gets it, his views are pretty much the same as mine. For him it's not a matter of convincing him what's going on, but more the technical dilemma of what to do as an alternative, particularly being on the cusp of retirement age. I want to tell him "pull out all your 401k and put it into <insert here>" and that's a question I can't even answer for myself. I guess other than encouraging them to buy useful survival items and non-perishable foods, I don't have an answer. I'm sort of taking the tact of "imagine you're preparing for an ice storm; now imagine it's an ice storm that is going to last for years".

I do hope at some point the kleptocrats responsible for doing this to millions of people are made to pay for it.

[charlesoakwood]

"I want to tell him "pull out all your 401k and put it into <insert here>" and that's a question I can't even answer for myself."

We don't know and we can't tell them.
Weisshaupt's assessment of where we appear to be heading is accurate.  Without the rule of law they may change the rules at whim.  That property may become "toxic", it may "become" so valuable that a fixed income can't pay the taxes and selling it garner not enough money for a new abode. But that is a worse case scenario.

[I firmly believe that PMs will have there day but it will peak and fall and something else will take it's place. And land and home, until they confiscate all historically is always a safe long term play.  Whether it goes up or down it's yours.]

If we continue the current trajectory it will be twenty years or so before our Ship really hits the sand.  Much more your worry than your parents.  

Then again we may have another election and elect a president that sequesters these rabid bureaucrats and takes the governors off our engines of commerce.  That's all we need. We would do a 180 so fast the world would spin and will be in high cotton.

We all should be wary and pay attention but now is not the time for fast action.

[ChrstnHsbndFthr]

Lord, I hope Charles is right.  I had no expectation to life this long, so I hope to not have to deal with stuff 20 years from now.....now back to spending my kids' inheritance!!

[Weisshaupt]

If we continue the current trajectory it will be twenty years or so before our Ship really hits the sand.  Much more your worry than your parents.  

How did you come to that conclusion?  

Europe is already imploding, and our debt to GDP is worse that what Cyprus has. Or Italy. Or Portugal. Or Spain. The derivatives expose (worldwide) will now cause a cascade effect in the global banking system, and each country will fall in turn - with the US near the end, but the reaction is already triggered via Cyprus and its bank holiday- those banks will never reopen, and if they do, they will be emptied. Euro politics prevents them from just "printing the money" to cover, and the fed can only do so much with the Dollar for Euro swaps - as those just make the wave all the larger when the wave finally hits here.

The only thing keeping us near the end of this now is the near mandatory  use of  the dollar to buy oil. However, The middle east has been effectively destabilized, and both China and Russia are aligning themselves with our enemies and buying gold in order to put their currency at the forefront after the inevitable world conflict, and all of those dollars overseas will come home to roost driving inflation here.

Meanwhile entitlements for Social security continue to grow as the boomers collect, SSI  disability claims are skyrocketing,  and  record spending on welfare and food stamps when added to full implementation of  Obamacare  will make the deficit grow even faster., and further exacerbate inflation.  Further,  all signs suggest TPTB know this and hence we have the push for defacto gun registration, and clearly DHS is gearing up to implement martial law and a police state, and that may push us into a civil war so violent, we may not notice the crash when it occurs.  

This could be on our shores next week - and would be if people were still not running to the dollar as the "safe haven" (and they do so because we will be near the last to go)  and that buys us time. They can keep this charade up for maybe 5 years - certainly no more than 10.  If we get the twenty you are talking about I will be overjoyed. By then I might actually have everything done, and have acquired the skills required.

The math is simply insurmountable now - the worldwide derivatives overhang assures collapse and the largest economic catastrophe in human history. The ship is already sinking, and the ocean bottom just isn't that far away. I appreciate your optimism, but I just don't see how you are realistically getting to a 20 Year number.

[charlesoakwood]

Your scenario is well thought out and as you say "five years", however, it may be ten, fifteen, twenty or not at all.

America has the most resourceful and productive people in the world.  Even our young one's minds have not been crippled as the youngsters in other competitive nations have.  Yes, there are geniuses in China and Russia but they have crippled minds that have difficulty designing and executing a two stage rocket or building and maintaining a reliable commercial jet airliner. On balance, they suck.

Push come to shove we do not need anything any other nation has and if we once again attain our freedoms from the regulators, "Katy, bar the door."

[Dan]

We pulled our 401k out and paid the penalty. It hurt at tax time, but as I read somewhere else, I think Ann Barnhardt, "If you don't hold it in your hands, it ain't yours!"
And further on that thought,
"Nothing you have that you cannot (or will not) stand in front of with a gun and defend is yours.  If you're either unable or unwilling to die to keep it the government will steal it to give your property to someone else, including someone else who did an irresponsible or even criminal thing."
Karl Denninger
I didn't save it, I've almost given up on cataloging the crap we going through, but recently, some dick-head said tehy would review the Dodd/Frank to see if they had "the authority" to seize 401k's". I'll try to find it, but you can bet it's coming. Buy metals and food. Learn skills that can be hired-out. Get in the best physical condition possible and give up smoking, junk food, drinking excessively. Avoid the avoidable ailments, 'cuz we're the wrong color to be using the health care system they're setting up for us. We're just supposed to pay for it.

My wife is still, ida know, in denial, or hopeful. SHe's letting me make preps, and took our 401k down, and she's arming up (even entered a match for next Friday at the gun club), but she's not ready to see teh forest is on fire.

My parents...our relationship is strained to the point of fracture. We had a big blowout years ago, and basically I had to go my own way. Too many things to bring up here, but it fell across teh whole family. I only see my parents for my kids sake now. My Dad is 73 and still working, but he's just built a beautiful home and they're happy. I'm actually glad for him, as he busted his ass for years taking care of us at the micro level. He still thinks everything will be fine, and if you just vote R we'll be okay. I told him recently because he and his father didn't take a stand years ago, my kids were f**ked. He didn't like that.
He never liked inconvenient truths.

Charles, I enjoy the heck out of your posts and see them as clear, reasoned and informed, as well as informative.
But you missed it with that last one, I think. 20 years!...I don't see 20 months, and I wouldn't bet on going past 20 weeks! The hope-filled observation that we may get someone who could do something about it (even if they really wanted to) isn't possible b/c the whole system, from the libiots in the opposition, to the idiots in the gene pool, and right down to the fundamental structure of our gov't (as it's practiced now) precludes any meaningful action being taken.
The problem is, at the risk of sounding pessimistic (LOL), insurmountable.
There will be pain.
There will be blood.
There almost has to be.
People like us won't accept the Cloward/ Piven outcome, even if we have, thus far, sat by and watched it...let it, come to fruition.
I don't think the glass is just half empty, I think it's shattered.


ETA: We had the most resourceful and productive folks, but generations of illegal immigration and the Dept Of Miseducation have taken care of that. 80% of NYC HS grads needed remedial math and reading last year, IIRC. That figure, or at least that situation, is not unique.
We are not what we used to be.

[AlanS]

Gold and silver will be unreliable sources of wealth. They are speculative plays.  If gold or silver become accepted and currency, the buying power of those items will appreciate dramatically. However if SDRs or other "new money" are introduced by TPTB, expect gold and silver to be confiscated or at least made illegal for trade ( silver is used industrially, so its the more difficult to do this with)  forcing you to the black market where it may be worth less in purchasing power than it is now. 

Executive Order 6102.

I'm so pissed off I could spit nails.

[Weisshaupt]

Your scenario is well thought out and as you say "five years", however, it may be ten, fifteen, twenty or not at all.

Granted. I am not psychic and I can't see the future. However,  I am looking at the facts and trying to come up with a reasonable estimate. Yes, some lightening bolt that I consider unlikely could come and change everything, but you aren't even suggesting what that sudden event might be. If left Free, America will recover from the collapse - but that will take at least 10 years on its own. Our infrastructure for manufacturing is basically gone and would need to be rebuilt. And that assumes there is no military wrought destruction .

I just don't think "doing nothing" because it <could> be 20 years out or never is a good choice based on the current evidence.
Hope for the best. Plan for the worst. And the worst is far more likely now than the best.

[Weisshaupt]

Charles, I enjoy the heck out of your posts and see them as clear, reasoned and informed, as well as informative.
But you missed it with that last one, I think. 20 years!...I don't see 20 months, and I wouldn't bet on going past 20 weeks!

This summer is my big fear. Gas will go up, and that may push unemployment to 25-30% If gas reaches $6-7 a lot of businesses based on cheaper fuel will simply fail- we would probably looking at a 2 Trillion deficit this year, especially if the Dems get the 3.7 they are already asking for.  Welfare and unemployment go up, Tax revenue goes down. And then Obamacare hits. A some point, foreigners start leaving the dollar.  There are so many triggers and black swan events that could crash this house of cards, its impossible to predict which will take it down or exactly when.

Back in 2008 I figured we had months...maybe a year.  And then I learned a vastly overestimated human intelligence, and vastly underrated the power of denial. I firmly believe  2008 was caused by some Fight Club tm taking huge amounts out of money market accounts in a deliberate attempt to bring down this house of cards. Who did it  was never revealed, but you can bet someone in Washington DC knows.

It would have gone completely in 2008 if they hadn't declared "QE to Infinity and Beyond"^TM the official policy going forward.  That bought us time. But each new set of QE has less effect than the last, and faith is being lost. Faith is what keeps the system up.  Its no surprise that people have decided to believe in it  no matter what .. and fundamentally that is why its lasted this long, and could last significantly longer-- even more years. Maybe even CO's 20. But I doubt it.

Place your faith in God,  and not a financial system planned by the wickedest of men. God is the only one with the power to fix this now.

"He replied, 'If you have faith as small as a mustard seed, you can say to this mulberry tree, "Be uprooted and planted in the sea," and it will obey you.'"  Luke 17:5-6

 

[Septugenarian]

The taxes due when liquidating an IRA is daunting to older folks who have a substantial IRA.  The net distribution could be as little as 40-45% of the gross value.  Then the issue is "what the heck do I do with it now?", especially if one is left with some $250K-$500K.  That's a lot of bullets. (what calibers?)     Just the thought of this can strike fear into a lot of folks.

[Weisshaupt]

The taxes due when liquidating an IRA is daunting to older folks who have a substantial IRA.  The net distribution could be as little as 40-45% of the gross value.  Then the issue is "what the heck do I do with it now?", especially if one is left with some $250K-$500K.  That's a lot of bullets. (what calibers?)     Just the thought of this can strike fear into a lot of folks.

Assuming we have years(2? , 3?), you draw it down a bit each year.. which you might as well do anyway because "dumping it into something" all at once  isn't easy nor wise, even if you are buying gold or silver, cost averaging is still a good strategy. Smaller takes  should keep your total gross distribution a bit higher..  We have been drawing our (smallish) account down as needed to keep up with expenses, being wary of what tax bracket we happen to be in that year and where the AMT will kick in.  The biggest take-out  was when we bought the Mountain cabin- using IRA money to pay that off in full. As we work on the current place , we may finally deplete it as we try to build a proper barn.. but right now our time is focused on house repairs and improvements, so no need to take the money out yet ( and we might get caught with our pants down in a Cyprus Holiday.. that is the risk)  But with the acquisition of my company, I may spend much of the year unemployed, and may even qualify for a hardship withdrawal without penalty.
 

Being scared when you should be scared is healthy.  Drawing a retirement account down is SCARY. The storm that is coming is scarier still.

[Glock32]

I certainly hope it does not take 20 years. Not because I have an impulsive desire to bring about some romanticized revolution, but because 20 years is a long time for an awful lot of incremental tyranny to become normalized. If we're disgusted at what the average American will tolerate now, how much worse will it be in 20 years if the current order somehow manages to limp along?

[Libertas]

My IRA was liquidated and reinvested and then lost in an unfortunate boating accident.

Stopped contributing to my 401k 2-3 years ago, applying my funds to other stuff, some of which also perished in an unfortunate boating accident.