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Author: sister45 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19221  
Subject: 401k Date: 3/16/2000 1:44 PM
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I will be 701/2 in December and have to start receiving portion of my 401k by April 2001. My question has do with the falling stockmarket. Part of my 401k is in guaranteed account and part in US Stocks. I've been loosing money in the US stocks since last June. Should I hang on hoping the market goes up or wait for a small up-surge in the market and transfer my Stocks into the guaranteed account? What do you think retired fools?
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2945 of 19221
Subject: Re: 401k Date: 3/16/2000 3:36 PM
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Greetings, Sister45, and welcome. You wrote:

<<I will be 701/2 in December and have to start receiving portion of my 401k by April 2001. My question has do with the falling stockmarket. Part of my 401k is in guaranteed account and part in US Stocks. I've been loosing money in the US stocks since last June. Should I hang on hoping the market goes up or wait for a small up-surge in the market and transfer my Stocks into the guaranteed account? What do you think retired fools? >>

Stocks go up and down everyday. That's why around Fooldom we say they are for money you do not need in the next five years. The average bear market (a loss of 20% or more) recovers in about 18 months, but that of 73-74 took somewhat longer than 60 months. If you sell your shares now, you guarantee yourself a loss. That 401k money will be paid out over your expected lifetime, which is certainly far longer than five years. While there are no guarantees, the inexorable pressure on the stock market is upwards. It's also highly unlikely those stocks will stay down for longer than that. However, in the final analysis you and you alone must be comfortable with the investment. If the short-term effects of a down market cause you to lose undue sleep at night, then certainly you shouldn't hang onto a large share of stocks. Only you can make that decision.

Regards..Pixy

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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2972 of 19221
Subject: Re: 401k Date: 3/18/2000 11:50 AM
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<< I will be 701/2 in December and have to start receiving portion of my 401k by April 2001. >>

I want to point out a tax pitfall that has gotten more than one. Since you turn 70 1/2 in 2000, you must take a year 2000 distribution. However, the law allows you to take that distribution as late as 4/2001. It is still a year 2000 distribution, and you must take a year 2001 distribution by 12/31/2001, in addition to the year 2000 distribution.

If you don't want a double distribution in 2001, take your 2000 distribution before 12/31/2000.

TMF ExRO
Phil Marti

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