So...........I've been here long enough to enroll in the 401k program. And I'm not. Have to turn in the signed waiver today. "True Believer", or what?

I remember a post of Mutha Nachu's saying, to the effect... "when people quit their job to cash in the 401k, there's no going back for them......."

True, isn't it?

Let 'er rip, pollyannas..... Ain't putting in even 1%, and I'm generally a 5%er, to the hilt.

-- Lisa (not@work.thanks), March 26, 1999

Answers

I am a true GI. I understand your concern, particularly with respect to long term investments.

However, I don't think opting out of your company's 401k plan is necessarily the best course of action. The sun will rise on January 2, 2000, and the tax man will expect his due on April 15, 2000, regardless of what happens. A 401k plan is one of the best deals going, for many reasons (including pre-tax deductions).

Unless you need the extra 1 to 5% for your personal preparations, I think you're making a mistake. But that's only my opinion.

-- Night (y2k_nightmare@my-dejanews.com), March 26, 1999.

However, I don't think opting out of your company's 401k plan is necessarily the best course of action.

With 401K's centralized on diversified mutual funds, you might want to reconsider this position. karen

-- karen@karen.com (nomoney@mutual.funds), March 26, 1999.

Night,

You wrote: "...The tax man will expect his due on April 15, 2000, regardless of what happens..."

I have to disagree. If the IRS is rendered largely nonfunctional because of massive computer problems, there won't be any 4/15/00 tax deadline next year. If you have information to the contrary, I know we would all appreciate hearing it.

-- Nabi Davidson (nabi7@yahoo.com), March 26, 1999.

Lisa,

While considering using one's funds for preparation now versus retirement funds later, is an indicator of how seriously one thinks Y2k will be, I disagree with Mutha's assessment of "no going back for them..."

If all is well after Y2K, one can contribute later to a retirement fund. Changing one's job is not a big deal anymore....average jobspan is much shorter these days...if that's what it takes to be able to contribute again.

However, if all is not well after Y2K then you would have acted most wisely in hindsight. Whatever impact there will be from Y2K, and even the most conservative objective financial experts will concede some financial downturn, it will hit first and foremost our financial systems. Whether or not the physical infrastructure's sun still rises or not, there will be a hit to the financial sector.

When this fubar hits it will be massive. Fubar of all times. When fubar hits, what happens to a program? Usually it crashes.

No one knows what will happen....but better to be prepared than sorry. I keep sensing "FUBAR - massive FUBAR" in my spirit and that's what I will prepare for. I pray it will just be limited to financial sectors and will not affect more than that.

-- Texan (tgif@ranch.com), March 26, 1999.

It depends on the format of the 401k, IMHO. The 401k of my company, for example, allows me to direct 100% of my contributions to company stock, or any one of 5 other investment options (3 of which are mutual funds of varying degrees of risk, 1 is a fixed income low risk bond fund, and one is company stock). My company matches me $.50 on the dollar in contributions. So while I have taken a "low risk position" in my 401k portfolio (50/50 split between bond fund and company stock), it does not make an iota of economic sense for me NOT to participate, even though I am a GI who thinks there's going to be big time disruptions, and am preparing accordingly. I guess the key is that I don't think Y2K is going to be TEOTWAWKI, and that:

• The tax man will still be collecting on April 15
• I will be retiring sometime in the future, with very little confidence that social insecurity will return even a small portion of retirement benefits to me.

Now, the results of our current exploits in Yugoville? That's another thing all together.

-- Night (y2k_nightmare@my-dejanews.com), March 26, 1999.

The 401K is a pretty good deal. Just don't put it in stock mutual funds. Mine only has 4 options. Company Stock, stock funds, bond funds and money market. Stocks look 3 times to high to me. I "helped" my mother in law lose some of her retirement once by finding her a bond mutual fund whose value went down when interest rates went up. WJC can convert short term bonds to long term bonds by Executive Order. So I am in the Money Market.

Wife is a teacher so she has a 403B It is in a Commodity Mutual Fund. Our IRAs are in Gold Mutual Funds and a fund that shorts the market.

I think EVERYTHING is being manipulated right now, to delay panic. If one of these things moves up in a big way, I'll reallocate, otherwise, I am sitting pat till the other side of 2000.

-- Noel Goyette (ngoyette@csc.com), March 26, 1999.

Its the biggest crapshoot I have ever been in.

-- dave (wootendave@hotmail.com), March 26, 1999.

yeah, and I want to know who all of you are going to get your money from when the market crashes? karen

-- karen (karen@karen.com), March 26, 1999.

Suppose I should give some vitals: (try not to to smack me too hard)..

32, single mom, in Texas (where power looks better than anywhere, in the short run), working IT for an HMO. BTW, did y'all know that doctors own practices and labs and hospitals and HMOs? Amazing little scheme we got cookin.

Anyway, I'm thinking that both producer and consumer prices are going to plummet - real estate usually goes first - and this is assuming that the Japanese Tanking Banks don't trash the whole scheme. Assuming I have a job, I think I'd want what cash I could get my hands on for buying low - whatever the commodity or vehicle.

Who knows. But thank y'all very much for your (ongoing) advice. I have until 5:00 today................

-- Lisa (lisa@man.tough), March 26, 1999.

It's all a crapshoot - but the point is to make the "least risk" intelligent decisions with your money, whether you work at WalMart or Morgan Stanley. And if you think SS is going to be around to help you out significantly when you retire, you might as well believe in the tooth fairy or put your money into the lottery. A 401k is also one of the few legitimate ways that a person can lower their annual tax burden. Again, face reality, taxes are NOT going away because of Y2k (they might not catch up with you on April 15, but they will catch up with you eventually), and there's no political will to change the tax code this year in any significant fashion.

There's a lot of difference between just "getting it" and "being smart about it".

-- Night (y2k_nightmare@my-dejanews.com), March 26, 1999.

Night,

Really disagree with about taxes...gov't computer systems in bad shape esp. taxman. Why were Marines doing military exercises to protect against rioting government workers not getting paid a week or 2 ago? Same government pays the taxman (or fails to pay them come post Y2K).

Bottomline, you have to decide where you are on Y2K 1-10 and plan accordingly. If TSHTF, the gov't. by all accounts will be hurting worse...unless they confiscate everything...and then kiss it all goodbye anyway.....

-- reality (comeon@getreal.com), March 26, 1999.

Lisa, look at your own situation. If you don't have a big tax bite, then look at your employer's matching contribution. If there is no matching contribution, don't tie up your money where you can't get it in an emergency.

If the FED prints $250B in bills (each one of which costs them 2 US cents to print, secure, account for and distribute), doesn't that create inflation?

Banks have FDIC insured money market accounts. Don't go over the limit with any one bank.

-- Noel Goyette (ngoyette@csc.com), March 26, 1999.

And don't forget the amazing y2k glitch people in government have conveniently forgotten to mention here lately in their little talks....when the Senators rent didn't get paid on their offices for about 2 months. Funny you don't hear about that now-a-days. If the govt. 'puters can't make monthly payments, don't see how they're gonna' track millions of w-2's and such. bye uncle sam, wherever you're hiding - karen

-- karen (karen@karen.com), March 26, 1999.

Lisa,

I'm in the same position you're in right now with eligibility. I've decided to use the money this year to pay down my car loan in preparation for some uncertain economic times, instead of placing it out of my reach in a 401k.

If you think about it, it's an investment either way. Don't sweat it. Just go with your gut and take your best shot.

-- Codejockey (codejockey@geek.com), March 26, 1999.

I'm more than 20 years from retirement. Granted, I think I'm going to be laid off next year, given the condition of the global economy. But, and this is a big but, what if nothing happens? I mean, we all say we will be happy as larks and willing to give everything to a food bank, etc, etc. A couple of points here. First, I can't touch this money and take the sizable hit on the taxes. Second, right this minute, I'm making some good retirement. But most importantly, I really don't trust it all enough not to do something. So, after the first quarter, I'm pulling all my assets out of stocks and so forth and placing them in the little account that only pays dollar for dollar. It's worth my piece of mind to sit on it for a year or more if I think there's a chance I can protect any of it. Will I lose it all? I don't know. The point is, it's not mine for 20 more years. I'm hedging this one with the pollies. Would the money help with prep? Sure it would. Just can't push myself over that fence. Can't give up all hope, you know?

-- margie mason (mar3 mike@aol.com), March 26, 1999.

margie, I'm most certainly not a polly. But I don't think it's pollyanish to be SMART, to the extent that you can, with your money.

Being smart with money, in good times and bad, is the difference between thems that have and thems that have not.

-- Night (y2k_nightmare@my-dejanews.com), March 26, 1999.

For decisions like these, better to be several days, weeks, etc. early than one day late. With only less than 2% cash (if that) in the overal money supply (est. 20 Trillion +) does anyone want to be heading to the banks with the rest of the knuckleheads when TSHTF? Has anyone seen the pictures from Russia with people jammed outside the banks? A little bit of sublimal conditioning? Like the singer aka "Prince" said...... "Cuz they say two thousand zero zero PARTY OVER ... Oops, out of time!".

-- Wm. Crown (gfc40@hotmail.net), March 26, 1999.

*click* sarcasm off!

Lisa,

This is the first thread I've read in a while that truly made me sad...I am DEAD serious. 401K is a long-term invest, that can be rolled-over into IRA's or whatnot... think long-term.

This is the kind of damage I've been harping on for months that the GRIFTERS are causing.. but I didn't peg you for one to swallow whole the cock-n-bull fiction.

Even Yardeni is predicting record DOW's by 2005-7...

*click* sarcasm on!

As for the rest of you DOOM MEME blowhards (particularly "dear Karen"ironic, no?)

Post the PROOF that the Gov is going to Tank, or

SHUT YOUR CAKEHOLES!!!

You have NOTHING to add but MORE NOISE to an already STATIC situation...

-- Mutha Nachu (---@getagrip....com), March 26, 1999.

I know, Mutha.

That's why I mentioned your (very ethical) observation.

I'm not trying to trash an established 401k, just not sure if it's safe to pump cash into a new one right now.

I agree, this is a very sad and very serious situation. But don't worry, I guarantee you less than 2% of the population is or will ever consider this dilemma.

-- Lisa (lisa@sad.too), March 26, 1999.

Lisa: Hope you'll read Deck's post (HE is a REAL economist...not a blowhard imitation, like some.) Y2K and Risk

-- Mutha Nachu (---@stillsad...the grifters win), March 26, 1999.

My brother-in-law is an IRS agent, my sister is claiming 9 on her withholding, they have moved all their 401K to other secure investments because he knows what's coming down. He knows what shape the IRS computer system is in. We're not investing in our 401K this year. If nothing happens come January 2000, then I'll be reinvesting the money somewhere else when I think the danger is over and I'm not going to lose it. What's wrong with being prudent?

-- bardou (bardou@baloney.com), March 26, 1999.