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Author: 0x6a74 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Re: 401(k)s are too risky for retirement Date: 5/9/2012 1:52 AM
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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
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