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Strategies & Market Trends : Waiting for the big Kahuna
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To: HairBall who wrote (30169)10/4/1998 8:34:00 PM
From: Gersh Avery  Read Replies (1) of 94695
 
LG .. re cash positions in 401K's

I've worked for three companies lately that have had no "cash" provision. None have had provisions for US government bonds.

My wife's plan does have a "cash" provision. However her plan also has no option for pure US Bonds.

I have no idea what the statistics are nationwide. However I would not be surprised to find out that a very large percentage of plans require people to take the loss in a event of a stock market drop.

Of the four plans that I have personally been exposed to my wife's seems to be the best.

Now that said .. there is no way to decide to take the cash out and take the tax hit. At one point we decided to take out a "loan" from the plan for 50% of the balance. Later we decided to stop the "loan payments." To stop the payments and take the tax hit required us to get a court order. I have no idea how we could get the balance out. And the "cash" option ... It's a joke .. the "cash" will be fine, as long as the company never defaults on their bonds.

There really needs to be some changes in the system that allows people to take gains if they feel that is needed. Next they need to be able to have FDIC on funds that they have chosen to take away from Wall Street.

Gersh
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