‘Panicky’ investors raiding their 401(k)s

[katty]

more: http://www.msnbc.msn.com/id/26868282/

‘Panicky’ investors raiding their 401(k)s
Rise seen in ‘hardship withdrawals’ — despite the tax penalty


By Jennifer Levitz

updated 6:17 a.m. PT, Thurs., Sept. 25, 2008
Economic and stock-market tremors are rattling the nest egg.

With stocks falling, credit tightening and unemployment rising, small investors have been raiding their 401(k) accounts or slashing contributions to the popular retirement plans, according to the latest tallies of plan administrators. Others, eager to shield their portfolios from further damage, are reducing their exposure to stock mutual funds to near record lows.

The behavior — described by some market watchers as panicky in the past week — has led to worries that the retirement prospects are dimming further for Americans, most of whom no longer have private-sector pensions to rely on.

[leftofcool]

1. We are probably going to pull out ours as well

Better off keeping the money in a safety deposit box than lose it all.

[UK populist]

3. Bad Idea, At least put it in a government backed bank

After this bailout goes through it won't take long for your money to depreciate with the hyper-inflation your country is going to face. Then again you could place it in to the commodities market and buy yourself some gold or silver immediately after the bailout while there is a small rally in the stock market and commodities falls before the crash and the inflation kicks in.

[ccinamon]

2. I cashed mine out several months ago...

and invested in new business equipment...I figured out in January that no matter what I did, I would end up losing 50% of the value of my 401...I thought it would be better invested in my business that languishing with the greedy old pigs on wall street.