Should I Withdraw the Money from My 401(k)?
Dear Mr. Hlava,
I was wondering if you could give me some advice about my 401(k). My cousin says that he can get me in on the ground floor of a new investment opportunity involving “bailout bags,” that’s the special sacks of money the government puts the money into before they give that money away to all the banks, auto manufacturers and insurance companies. Anyhoo, he says I’ll get a much better return on my money than if it was sitting in a 401(k). Is that even possible? What should I do?
Annie in Accounting
Keep your money in the 401(k). You work for me, which means you’ll need as much financial security as you can get sooner than you think. Plus, over time, assuming that you live long enough (which the banks and government assume you won’t), you will see a fantastic return on investment simply from consistent contributions to your retirement fund. But, let’s assume for a moment that you did give your cousin the money. Even if his “bailout bags” manufacturing venture did turn out to be a success, he will find a way to screw you out of the money that’s rightfully yours. If he fails in his venture, you lose all your money anyway as well as a relationship with a family member. But when you keep your money in a 401(k) and the government or fund-managers lose your money in the market, you at least can still go have a beer with your cousin to complain about the state of capitalism in this country.
Richard Hlava, CEO
Comments are closed.