[quote=barnaby33]jimmeyle, I’d pull out of your 401k. Tax deferral doesn’t mean anything if you lose the money. I know I stopped contributing over a year ago. I’d rather eat 50% in taxes than 100% in losses.
As to where to keep your money, a mattress is a good option at this point.
Josh[/quote]
Extremely Bad Advice
Decisions like this will make you poor.
The 40-50% loss to taxes is guaranteed when liquidating a 401k (assuming you simply pull it out).
If you think you need to be out of dollar-denominated assets here is a better alternative:
1. Put your funds into the cash equivalent or short-term bond or stable value option in the 401k
2. Take a loan out for up to 50% of the 401k balance.
3. Put the loan proceeds into the whatever genius position you would have put the liquidated 401k proceeeds.
This approach avoids the immediate tax hit and allows you to demonstrate that perhaps you are not a genius gold or foreign currency speculator without taking a huge tax hit. If the return you get on the funds invested outside were a good idea they would greatly exceed the loan interest.
