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Liquidating 401k plans

taxes and penalties you could...

As investors start to educate themselves about investing, many begin to realize that their k might not all they thought it was cracked up to be. After all, even Ted Benna, the man who popularized the tax loophole that became the k program, has all but disowned it.

But should you liquidate your k? There Liquidating 401k plans good reasons to liquidate your k or perhaps just put future savings and investments dollars elsewhere:.

In spite of compelling reasons to liquidate a kthere are also important considerations and good reasons why you may NOT want to liquidate your k — or not right now.

Roll It Over

Before considering such a move, be well aware of the following: You must be prepared to pay the taxes and penalties — both financially and mentally! Even when it makes sense numerically, it is often very difficult to pay all those taxes at once. The timing may be all wrong to pull out of your current investments in your k. Under-educated Liquidating 401k plans tend to pull their money at the exact wrong time — after a large decline.

It feels counter-intuitive, but the best time to move Liquidating 401k plans money from the market is when it has been performing well. We agree with Andy Tanner, author of k aosliquidating your k without having a sound strategy for what to do NEXT is not a good plan.

One problem is that qualified plans have led many people to under-save and over-invest. It is imperative that people SAVE — safely, aggressively, early and often. Most people have far too few liquid assets that can be used for emergencies or opportunities, and too many assets in restricted environments. Interestingly enough, when Benna tells the history of k plans, he reveals that they began with a mere 2 options: An insurance company would offer a fund at a guaranteed rate, and the other option would be a broad, generally growth-oriented mutual fund, though sometimes the company stock plan which, as we all know, "Liquidating 401k plans" be risky business.

Technically, yes: After you've left...

Yet there is another issue with the investment options provided in a typical k. Real estate fits this definition. Business ownerships and partnerships can fit this definition.

Fortunately, there are easy alternatives...

Liquidating 401k plans There is another type of alternative investment can sometimes be used within the qualified plan environment.

Formerly a best-kept secret amongst corporate investors until the doors opened for individuals to benefit from them as well, this investment allows investors to have an equity position in an asset that is literally guaranteed by the most stable financial companies around!

The investment I am describing is Life Settlements.

Key takeaways

Pros and Cons and Facts. Liquidating 401k plans can also be purchased apart from an IRA. And if you do choose to liquidate a k — or a portion of one — they can be an excellent place for newly-freed funds. We can also discuss options — if appropriate — for freeing your money from a qualified plan or simply creating alternative investment or savings vehicles for new dollars.

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