In response to:

Dave Says Don't be Dumb

Louis200 Wrote: Nov 27, 2012 6:10 AM
I love ya Dave, but 401s are the stupidest thing since triangular catfish. You give up the most basic protections for your investments in the hope of getting a company match (which most companies don't offer any more) and a better tax rate (which can be changed at any time, but even now works out to be the same in practice) and in return... what? You can't use stops. Your investment choices are VERY limited. For many people, you can't rotate out into cash until the end of the day at SOONEST, making sure it is YOU not the big boys that get burned in a crash.
Charles SWVA Wrote: Nov 27, 2012 9:44 AM
I'm with you Louis, you are far smarter than Dave. Dave has figured out that a company match makes 100% on your investment the first year and you have figured out that 100% for one year is a poor investment. Brilliant !! You have also figured out that if the company doesn't do the match any more, you won't get. More brilliance !!

I do like you comment about triangular catfish. I want one of them in spite of your opinion that they are stupid.

Dear Dave,

Is it a good idea for a married couple in their early thirties, who have a lot of student loan debt, to cash out one of their 401(k)s to pay it off?


Dear Marcy,

No way! You never cash out a 401(k) or IRA to pay off debt, unless it’s to avoid a foreclosure or bankruptcy. Let’s say you take $50,000 out of your 401(k). Do you know what happens next? They’re going to charge you a 10 percent penalty, plus your tax rate. If you make $75,000 a year, that puts you in a 25 percent...