The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/one-thing-that-can-happen-during-a-recession-or-30028548.aspx

Subject:  Re: 401(k)s are too risky for retirement Date:  5/9/2012  1:52 AM
Author:  0x6a74 Number:  70626 of 76079

One thing that can happen during a recession or economic downturn is that some people take loans out from their 401(k). A 401(k) that had a pre-recession worth $100,000 may go down to a worth of only $50,000 if the 401(k) holder takes a $50,000 loan from it. The 401(k) has now lost 50% of its value.


another thing that can happen in a downturn is the market value can drop

so Mr Market might decrease your 100k to 70k,
and when/if you borrow 50k (selling near a low?) you're left with only 20k
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us