Why I Cashed Out my 401k Retirement Plan
If everything you thought about 401k retirement plans were false, when would you want to know? If you learned about the misconceptions surrounding 401k investments, what would you do?
When I entered the workforce, I invested in my employer's 401k. I felt I understood everything there was to know about the "qualified retirement plan." I soon found out that I didn't know the complete story.
Here are 3 big reasons why I stopped contributing to my 401k and ultimately cashed it out.
Liquidity
Your money in a 401k retirement plan is like Enter and Exit doors of a grocery store. It's easy to get in but difficult to get out. When you sign up for a 401k, you cannot access your money until you reach the age of 59 1/2.
You can cash out your plan but only if you are no longer with your employer. Once you do so, you are penalized. Yes, you are penalized for withdrawing your own money.
Control
You have limited control with these plans. Sure, you can pick your 401k investments, but you have no control over how the stock market will perform.
You have no control over your cash. You can take loans against your plan but you must pay it back within 5 years or immediately if you are no longer with your employer.
You may be in a situation where you are required to pay it back when you no longer have the means to do so.
One Function
The money in a 401k retirement plan has only one function: savings. If you have credit card balances with high interest rates, your could be better utilized to pay down debt rather than ride the market roller coaster.
When your plan take a financial hit, you cannot deduct that from your taxes.
There are no guarantees. People fund these plans with the intention of funding their retirement lifestyle. If your plan is in a down market, your guess is as good as mine as to when you should distribute the funds. Retirement is the last place where you want uncertainty.
These misconceptions pale in comparison to the one reason why people invest in these plans. I believe it's the most damaging.
If you don't want to base your future wealth on this false hope, find out what the biggest misconception is about 401k retirement plans.
Are you losing money in your 401k retirement plan? Are you questioning popular 401k advice? Imagine the relief you would feel if you finally found out the truth. You would be able to make more sound financial decisions.
Click here to to discover the truth about 401k retirement plans.
Isn't it time you choose financial freedom.
When I entered the workforce, I invested in my employer's 401k. I felt I understood everything there was to know about the "qualified retirement plan." I soon found out that I didn't know the complete story.
Here are 3 big reasons why I stopped contributing to my 401k and ultimately cashed it out.
Liquidity
Your money in a 401k retirement plan is like Enter and Exit doors of a grocery store. It's easy to get in but difficult to get out. When you sign up for a 401k, you cannot access your money until you reach the age of 59 1/2.
You can cash out your plan but only if you are no longer with your employer. Once you do so, you are penalized. Yes, you are penalized for withdrawing your own money.
Control
You have limited control with these plans. Sure, you can pick your 401k investments, but you have no control over how the stock market will perform.
You have no control over your cash. You can take loans against your plan but you must pay it back within 5 years or immediately if you are no longer with your employer.
You may be in a situation where you are required to pay it back when you no longer have the means to do so.
One Function
The money in a 401k retirement plan has only one function: savings. If you have credit card balances with high interest rates, your could be better utilized to pay down debt rather than ride the market roller coaster.
When your plan take a financial hit, you cannot deduct that from your taxes.
There are no guarantees. People fund these plans with the intention of funding their retirement lifestyle. If your plan is in a down market, your guess is as good as mine as to when you should distribute the funds. Retirement is the last place where you want uncertainty.
These misconceptions pale in comparison to the one reason why people invest in these plans. I believe it's the most damaging.
If you don't want to base your future wealth on this false hope, find out what the biggest misconception is about 401k retirement plans.
Are you losing money in your 401k retirement plan? Are you questioning popular 401k advice? Imagine the relief you would feel if you finally found out the truth. You would be able to make more sound financial decisions.
Click here to to discover the truth about 401k retirement plans.
Isn't it time you choose financial freedom.
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