General Discussion

Totally Tunsie

(11,860 posts)

23. Are you prepared and will you be able to live on Social Security

Thu May 14, 2020, 01:16 PM

May 2020

once your 401(k) funds run out? Expenses in the future will be higher.

Are you OK with taking a big tax hit for your one-time withdrawal? It will be counted as income and taxed as such for the year of withdrawal.

If you truly believe as you say "the worst is yet to come and it's going to be long term", are you ready to face that with no back-up funds in a 401(k)?

Remember too, that you and your wife are probably healthier and more able to work now than you will be in future years. It won't be as easy later to supplement your Social Security if you're not well in future years.

Please don't act in panic. Good luck with your decision(s).

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Time is running out. We must prepare for the worst. I may cash out my 401k. [View all] shockey80 May 2020 OP

Panic is not the way to go IMO BannonsLiver May 2020 #1

George Steinbrenner once said, "never sit around discussing things rationally when the situation brewens May 2020 #3

I think George Costanza said that as well. BannonsLiver May 2020 #5

I don't think it's a real quote and Seinfeld may be where I got that actually. It's just funny to brewens May 2020 #12

That's not panic, that's survival. shockey80 May 2020 #8

Yeah BannonsLiver May 2020 #11

I'm in the same boat hamsterjill May 2020 #2

Exactly what happened to us in 2009. LakeArenal May 2020 #20

You can sell the stocks and bonds in your 401K and leave it in there as cash leftieNanner May 2020 #22

I'm worried but trying not to do anything drastic. Mike 03 May 2020 #4

Don't. If you are afraid of the market, JenniferJuniper May 2020 #6

Do not cash out! Johnny2X2X May 2020 #7

It's not about risk. They need the money DrToast May 2020 #10

I have not made a final decision yet. shockey80 May 2020 #17

Surely your plan has a low risk/reward "cash" fund. mobeau69 May 2020 #9

He's over 60. There isn't a 10% penalty DrToast May 2020 #15

If you are 55 or over and quit or lose your job for any reason, the 10 pct penalty is waived. roamer65 May 2020 #16

Thanks. So few know about the Rule of 55, JenniferJuniper May 2020 #21

Since my odometer rolled the "double nickel", I see my 401k as a big UI fund. roamer65 May 2020 #24

I deliberately left my 401k with JenniferJuniper May 2020 #39

Makes sense. roamer65 May 2020 #40

You get it. shockey80 May 2020 #18

The 10% penalty will be waived but they'd still have a tax liability. Totally Tunsie May 2020 #25

When people start abruptly withdrawing their 401Ks, the markets will tank. n/t Yavin4 May 2020 #13

Mine limits withdrawals. roamer65 May 2020 #14

Hope my mistake helps you marlakay May 2020 #19

I hear you, my response is this. shockey80 May 2020 #27

Even Kirk sought Spock's advice when things got tough Fiendish Thingy May 2020 #29

Are you prepared and will you be able to live on Social Security Totally Tunsie May 2020 #23

The other side of the equation is downsizing and reducing expenses captain queeg May 2020 #26

Your situation is something like mine. shockey80 May 2020 #30

My 401k is doing much better than the S&P Fiendish Thingy May 2020 #28

I Almost Completely Agree ProfessorGAC May 2020 #35

I was scared to even look at my last three statements, but when Mike 03 May 2020 #37

Transfer it into a fidelity acct.. Maxheader May 2020 #31

Rent in Costa Rica is $450/month Bluesaph May 2020 #32

Good advice from everyone, thank you. shockey80 May 2020 #33

I take some comfort in the fact that the vast majority of your predictions are completely wrong. nt LexVegas May 2020 #34

Enjoy your comfort. shockey80 May 2020 #36

Have you asked what you have been saving this money for? world wide wally May 2020 #38

Exactly. shockey80 May 2020 #41

Beware estimated tax payments as well as taxes! nitpicker May 2020 #42

Read IRS Publication 505 for more information on estimated taxes nitpicker May 2020 #43