What are you doing with your 401K?

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turbo8214
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What are you doing with your 401K?

Post by turbo8214 » Fri Mar 27, 2020 9:46 am

I have transferred my non-401K retirement funds into a Permanent Portfolio, after being in a typical Bogleheads 60/40.

My 401K, like many of them, have limited options (and no brokerage window). I currently have it in a 60/40 and it's down nearly 25% for the year.

To those of you who invest in a 401K, what have you done with yours? Do you combined it with your other retirement account(s)? Or do you keep it separate, using a different strategy, and make it part of your Variable Portfolio? If you combine it, how do you balance it with other accounts that are taxed differently (Roth or taxable, for example)?
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ochotona
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Re: What are you doing with your 401K?

Post by ochotona » Fri Mar 27, 2020 9:52 am

For one thing all new money to cash now!
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Re: What are you doing with your 401K?

Post by dualstow » Fri Mar 27, 2020 9:58 am

solo 401(k):
I don't contribute new money to this account but this is the space where stocks are traded and sometimes held for less than a year before taking profits.

It holds a lot of 30-Year treasury bonds so it is part of the pp.

The other day, I sold a Fidelity intermediate treasury fund and put it into the market (FSKAX).
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Re: What are you doing with your 401K?

Post by pmward » Fri Mar 27, 2020 10:03 am

I include my 401k in my PP. I hold all gold in taxable. For bonds in 401k I have to use TBM and I use that as an approximate substitute for the 50/50 barbell. I hold the bond barbell where space allows (cash in taxable, 30 year treasuries in IRA)
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Re: What are you doing with your 401K?

Post by turbo8214 » Fri Mar 27, 2020 10:18 am

ochotona wrote:
Fri Mar 27, 2020 9:52 am
For one thing all new money to cash now!
I have thought about doing this.
Do you plan to convert it to stock when you think it hits bottom? Or do you plan on leaving it cash?
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Re: What are you doing with your 401K?

Post by turbo8214 » Fri Mar 27, 2020 10:20 am

dualstow wrote:
Fri Mar 27, 2020 9:58 am
solo 401(k):
I don't contribute new money to this account but this is the space where stocks are traded and sometimes held for less than a year before taking profits.

It holds a lot of 30-Year treasury bonds so it is part of the pp.

The other day, I sold a Fidelity intermediate treasury fund and put it into the market (FSKAX).
I contribute enough to get the employer match, but no more. It is difficult to turn down free money. For years after the GFC, my employer took away the employer match and did not restore the full match until a few years back.
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Re: What are you doing with your 401K?

Post by turbo8214 » Fri Mar 27, 2020 10:29 am

pmward wrote:
Fri Mar 27, 2020 10:03 am
I include my 401k in my PP. I hold all gold in taxable. For bonds in 401k I have to use TBM and I use that as an approximate substitute for the 50/50 barbell. I hold the bond barbell where space allows (cash in taxable, 30 year treasuries in IRA)
How do you balance it? For example, let's say you have 2K in stocks (in your 401), 2K in gold, as well as 2k in bonds and 2k in cash. On paper, it looks like each has 25%. When you withdraw from your 401, it will be taxed as income so your number will the different than your gold number.
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Re: What are you doing with your 401K?

Post by pmward » Fri Mar 27, 2020 10:31 am

turbo8214 wrote:
Fri Mar 27, 2020 10:29 am
pmward wrote:
Fri Mar 27, 2020 10:03 am
I include my 401k in my PP. I hold all gold in taxable. For bonds in 401k I have to use TBM and I use that as an approximate substitute for the 50/50 barbell. I hold the bond barbell where space allows (cash in taxable, 30 year treasuries in IRA)
How do you balance it? For example, let's say you have 2K in stocks (in your 401), 2K in gold, as well as 2k in bonds and 2k in cash. On paper, it looks like each has 25%. When you withdraw from your 401, it will be taxed as income so your number will the different than your gold number.
The time I'll actually withdraw anything is so many years in the future that it isn't worth even thinking about. And even then, I would likely not take tax into account and just keep all assets balanced. Also, I would have rolled my 401k into an IRA before this happened, where I would have access to any and all assets I could possibly desire.
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Re: What are you doing with your 401K?

Post by ochotona » Fri Mar 27, 2020 11:13 am

turbo8214 wrote:
Fri Mar 27, 2020 10:18 am
ochotona wrote:
Fri Mar 27, 2020 9:52 am
For one thing all new money to cash now!
I have thought about doing this.
Do you plan to convert it to stock when you think it hits bottom? Or do you plan on leaving it cash?
Oh it'll go into the stock market for sure. Just not when VIX is 65 ! The house is on fire.
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Re: What are you doing with your 401K?

Post by turbo8214 » Fri Mar 27, 2020 11:17 am

pmward wrote:
Fri Mar 27, 2020 10:31 am
turbo8214 wrote:
Fri Mar 27, 2020 10:29 am
pmward wrote:
Fri Mar 27, 2020 10:03 am
I include my 401k in my PP. I hold all gold in taxable. For bonds in 401k I have to use TBM and I use that as an approximate substitute for the 50/50 barbell. I hold the bond barbell where space allows (cash in taxable, 30 year treasuries in IRA)
How do you balance it? For example, let's say you have 2K in stocks (in your 401), 2K in gold, as well as 2k in bonds and 2k in cash. On paper, it looks like each has 25%. When you withdraw from your 401, it will be taxed as income so your number will the different than your gold number.
The time I'll actually withdraw anything is so many years in the future that it isn't worth even thinking about. And even then, I would likely not take tax into account and just keep all assets balanced. Also, I would have rolled my 401k into an IRA before this happened, where I would have access to any and all assets I could possibly desire.
I'm guessing that you are mostly in tax deferred accounts? Do you have a Roth IRA? I can see a Roth skewing the numbers quite a bit when putting a Roth in the same category as a tax deferred account.
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Re: What are you doing with your 401K?

Post by turbo8214 » Fri Mar 27, 2020 11:18 am

ochotona wrote:
Fri Mar 27, 2020 11:13 am
turbo8214 wrote:
Fri Mar 27, 2020 10:18 am
ochotona wrote:
Fri Mar 27, 2020 9:52 am
For one thing all new money to cash now!
I have thought about doing this.
Do you plan to convert it to stock when you think it hits bottom? Or do you plan on leaving it cash?
Oh it'll go into the stock market for sure. Just not when VIX is 65 ! The house is on fire.
Someone told me he's doing the same and waiting until VIX is 20 or under. Would you say that's a good rule of thumb or do you have a different number in mind?
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Re: What are you doing with your 401K?

Post by pmward » Fri Mar 27, 2020 11:24 am

turbo8214 wrote:
Fri Mar 27, 2020 11:17 am
pmward wrote:
Fri Mar 27, 2020 10:31 am
turbo8214 wrote:
Fri Mar 27, 2020 10:29 am
pmward wrote:
Fri Mar 27, 2020 10:03 am
I include my 401k in my PP. I hold all gold in taxable. For bonds in 401k I have to use TBM and I use that as an approximate substitute for the 50/50 barbell. I hold the bond barbell where space allows (cash in taxable, 30 year treasuries in IRA)
How do you balance it? For example, let's say you have 2K in stocks (in your 401), 2K in gold, as well as 2k in bonds and 2k in cash. On paper, it looks like each has 25%. When you withdraw from your 401, it will be taxed as income so your number will the different than your gold number.
The time I'll actually withdraw anything is so many years in the future that it isn't worth even thinking about. And even then, I would likely not take tax into account and just keep all assets balanced. Also, I would have rolled my 401k into an IRA before this happened, where I would have access to any and all assets I could possibly desire.
I'm guessing that you are mostly in tax deferred accounts? Do you have a Roth IRA? I can see a Roth skewing the numbers quite a bit when putting a Roth in the same category as a tax deferred account.
I have a traditional 401k, a Roth IRA, and a taxable brokerage account. But still, at 39 years old for me these things don't matter. By the time I retire I'll probably both have moved all my 401k to an IRA, and likely also done some Roth conversions. Nothing is set in stone. I just balance based on where I am today. There's also no law that says one cannot sell one asset in one account and buy in another in the future to redistribute where each asset is. I see no reason to worry about anything other than present day nominal values and completely ignore future tax.
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Re: What are you doing with your 401K?

Post by ochotona » Fri Mar 27, 2020 11:24 am

Below 20 is good. But if VIX is high, and the market takes a -50% haircut, by all means start buying, with knowledge that another -50% move is still possible. Be very patient. We are just beginning perhaps.

=======================================================

London, November 10, 1942

I notice, my Lord Mayor, by your speech you have reached the conclusion that news from the various fronts has been somewhat better lately.

In our wars, episodes are largely adverse but the final result has hitherto been satisfactory. Eddies swirl around us, but the tide bears us forward on its broad, restless flood.

In the last war we were uphill almost to the end. We met with continual disappointments and with disasters far more bloody than anything we have experienced so far in this. But in the end all oppositions fell together and our foes submitted themselves to our will.

We have not so far in this war taken as many German prisoners as they have taken British, but these German prisoners will, no doubt, come in in droves at the end, just as they did last time.

I have never promised anything but blood, tears, toil and sweat. Now, however, we have a new experience. We have victory-a remarkable and definite victory. The bright gleam has caught the helmets of our soldiers and warmed and cheered all our hearts.

The late M. Venizelos observed that in all her wars England-he should have said Britain, of course-always won one battle, the last. It would seem to have begun rather earlier this time.

General Alexander, with his brilliant comrade and lieutenant, General Montgomery, has made a glorious and decisive victory in what I think should be called the Battle of Egypt. Rommel's army has been defeated. It has been routed. It has been very largely destroyed as a fighting force.

This battle was not fought for the sake of gaining positions or so many square miles of desert territory. General Alexander and General Montgomery fought it with one single idea-to destroy the armed forces of the enemy and to destroy them at a place where the disaster would be most punishable and irrevocable.

All the various elements in our lines of battle played their part. Indian troops, Fighting French, Greeks, representatives of Czechoslovakia and others. Americans rendered powerful and invaluable service in the air. But as it happened, as the course of battle turned, it has been fought throughout almost entirely by men of British blood and from the dominions on the one side and by Germans on the other. The Italians were left to perish in the waterless desert. But the fighting between the British and Germans was intense and fierce in the extreme.

It was a deadly battle. The Germans have been outmatched and outfought with every kind of weapon with which they had beaten down so many small peoples and, also, larger, unprepared peoples. They have been beaten by many of the technical apparatus on which they counted to gain domination of the world. Especially is this true in the air, as of tanks and of artillery, which has come back into its own. The Germans have received that measure of fire and steel which they have so often meted out to others.

Now, this is not the end. It is not even the beginning to the end. But it is, perhaps, the end of the beginning.
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Re: What are you doing with your 401K?

Post by vnatale » Fri Mar 27, 2020 11:32 am

ochotona wrote:
Fri Mar 27, 2020 11:24 am
Below 20 is good. But if VIX is high, and the market takes a -50% haircut, by all means start buying, with knowledge that another -50% move is still possible. Be very patient. We are just beginning perhaps.

=======================================================

London, November 10, 1942

I notice, my Lord Mayor, by your speech you have reached the conclusion that news from the various fronts has been somewhat better lately.

In our wars, episodes are largely adverse but the final result has hitherto been satisfactory. Eddies swirl around us, but the tide bears us forward on its broad, restless flood.

In the last war we were uphill almost to the end. We met with continual disappointments and with disasters far more bloody than anything we have experienced so far in this. But in the end all oppositions fell together and our foes submitted themselves to our will.

We have not so far in this war taken as many German prisoners as they have taken British, but these German prisoners will, no doubt, come in in droves at the end, just as they did last time.

I have never promised anything but blood, tears, toil and sweat. Now, however, we have a new experience. We have victory-a remarkable and definite victory. The bright gleam has caught the helmets of our soldiers and warmed and cheered all our hearts.

The late M. Venizelos observed that in all her wars England-he should have said Britain, of course-always won one battle, the last. It would seem to have begun rather earlier this time.

General Alexander, with his brilliant comrade and lieutenant, General Montgomery, has made a glorious and decisive victory in what I think should be called the Battle of Egypt. Rommel's army has been defeated. It has been routed. It has been very largely destroyed as a fighting force.

This battle was not fought for the sake of gaining positions or so many square miles of desert territory. General Alexander and General Montgomery fought it with one single idea-to destroy the armed forces of the enemy and to destroy them at a place where the disaster would be most punishable and irrevocable.

All the various elements in our lines of battle played their part. Indian troops, Fighting French, Greeks, representatives of Czechoslovakia and others. Americans rendered powerful and invaluable service in the air. But as it happened, as the course of battle turned, it has been fought throughout almost entirely by men of British blood and from the dominions on the one side and by Germans on the other. The Italians were left to perish in the waterless desert. But the fighting between the British and Germans was intense and fierce in the extreme.

It was a deadly battle. The Germans have been outmatched and outfought with every kind of weapon with which they had beaten down so many small peoples and, also, larger, unprepared peoples. They have been beaten by many of the technical apparatus on which they counted to gain domination of the world. Especially is this true in the air, as of tanks and of artillery, which has come back into its own. The Germans have received that measure of fire and steel which they have so often meted out to others.

Now, this is not the end. It is not even the beginning to the end. But it is, perhaps, the end of the beginning.
And, then the English people got rid of Churchill shortly after World War II? He used to spend enormous sums of money on his daily alcohol consumption.

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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