Comments on: The Three Best Ways To Rescue Your 401(k) http://www.contrarianprofits.com/articles/the-three-best-ways-to-rescue-your-401k/12600 Access market-beating ideas from the world's top investment gurus on stock market investing, the gold market, ETFs, Forex trading and real estate values. Thu, 19 Nov 2009 15:59:58 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Scott S http://www.contrarianprofits.com/articles/the-three-best-ways-to-rescue-your-401k/12600/comment-page-1#comment-11470 Scott S Sat, 31 Jan 2009 00:59:00 +0000 http://www.contrarianprofits.com/?p=12600#comment-11470 I agree with the comment above. I did the same thing. I borrowed against my 401K to buy gold and silver (the physical kind). The paper currency back by our government is going to get hammered. The stock market may go up but will it go up enough to keep up with a dropping US dollar over the next years. The government deficit it out of control. The dollars got to be back by gold again to keep the government in check. I agree with the comment above. I did the same thing. I borrowed against my 401K to buy gold and silver (the physical kind). The paper currency back by our government is going to get hammered. The stock market may go up but will it go up enough to keep up with a dropping US dollar over the next years. The government deficit it out of control. The dollars got to be back by gold again to keep the government in check.

]]> By: Joe B http://www.contrarianprofits.com/articles/the-three-best-ways-to-rescue-your-401k/12600/comment-page-1#comment-11445 Joe B Fri, 30 Jan 2009 14:48:53 +0000 http://www.contrarianprofits.com/?p=12600#comment-11445 Another option is to take a loan out on your 401(k), which allows you to diversify it into assets not available within your plan (and get it out of USD). The "safe" option in my plan is a money market fund consisting mostly of t-bonds, so needless to say I don't feel that it's very safe. I am taking out a loan to put my money into gold and other inflation hedges, and paying it back over 5 years, presumably on a cheaper dollar. The interest on the loan goes back into my 401(k), so I'm basically paying myself. The money comes out tax free, and remains that way unless I default. The loan is repaid with after-tax dollars, but this is no additional tax burden on the balance withdrawn. The interest on the loan would be like a non-deductible additional contribution, but it is not an additional tax burden overall - only the liquidity is lost. Obviously each 401(k) has different rules, and this option may not make sense for everyone. It may affect employer matching contributions and there may be fees involved. Another option is to take a loan out on your 401(k), which allows you to diversify it into assets not available within your plan (and get it out of USD).

The “safe” option in my plan is a money market fund consisting mostly of t-bonds, so needless to say I don’t feel that it’s very safe. I am taking out a loan to put my money into gold and other inflation hedges, and paying it back over 5 years, presumably on a cheaper dollar.

The interest on the loan goes back into my 401(k), so I’m basically paying myself. The money comes out tax free, and remains that way unless I default. The loan is repaid with after-tax dollars, but this is no additional tax burden on the balance withdrawn. The interest on the loan would be like a non-deductible additional contribution, but it is not an additional tax burden overall – only the liquidity is lost.

Obviously each 401(k) has different rules, and this option may not make sense for everyone. It may affect employer matching contributions and there may be fees involved.

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