Thoughts on Liquidating Retirement Accounts

HornPorn

Lil-Rokslider
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Have other assets that ensure long-term financial security, so I don't "need" this money necessarily to have a secure retirement, though it is representative of a 20 year professional career and is something I have been proud of accumulating.

Has anyone done this, and if so, what was your experience/what would your advice be given my stated situation above?
 
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Joined
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Not sure of what your distribution between pension, 401k, or roth but you'll likely have a hefty tax liability. I also don't know what your job situation is, but 39% loss isn't unheard of. I think I took at 12% loss when the market turned a little over a year ago. I've recouped about 40% of my losses and I'm moving a lot of stuff to cash positions because i think we're seeing the last bubble before a hard market drop.

Also are your accounts self managed? Despite loss have you considered reallocation of funds?

Is you plan to pull all the funds and invest into hard assets or just to have "cash on hands"
 
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HornPorn

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Is you plan to pull all the funds and invest into hard assets or just to have "cash on hands"
Its to pay for a renovation of our primary residence that we are 65% through, so to invest in a hard asset.
 
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Its to pay for a renovation of our primary residence that we are 65% through, so to invest in a hard asset.

Have you considered taking a loan against your account vs withdraw? A loan has no penalty.

Is your renovation adding something you value or something a future buyer would value? Most home renovations are "personal" value added vs true value added. I've seen some "custom" homes that where listed for silly money but never sold because no one wants it.

Case in point is Michael Jordans custom mansion.. I don't think anyone is going to buy it unless they really love MJ.
 

dlee56

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If you’re thinking about pulling because of your unrealized loss then don’t. Stay, it’ll turn around at some point.

If you’re wanting to pull to contribute to other assets (real estate, etc), go nuts if that’s your hearts desire.

One thing I’m planning on doing is yearly converting the max amount of any tax-free IRAs into a Roth IRA and paying the taxes on it now instead of when I retire. Sucks to pay taxes now but what are the odds of taxes being lowered at any point in the future.
 
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HornPorn

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If you’re thinking about pulling because of your unrealized loss then don’t. Stay, it’ll turn around at some point.
Yeah, the loss was only a data point I wanted to share, but I realize now it is not something that would help me as this is not a taxable account.
 

jpmulk

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You only lose when you take your money out. Ride the wave and dont stress about it. If your are close to retirement, after it bounces back move it to something less volatile.

You said you have other assests so it sounds like you dont need this money right now. So you would literally only hurt yourself by pulling the money out. Dont see an incentive to do that based in what you posted.
 

5MilesBack

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Currently sitting on an unrealized loss of 39% in my retirement accounts.

it is representative of a 20 year professional career and is something I have been proud of accumulating.
Wait a minute......you've been accumulating these assets in retirement accounts for 20 years and they're sitting at a 39% unrealized loss????? How is that possible? What are they in, and have they always been in those assets?

Even if you put all that money into the market at the peak back in Nov 2021, you still wouldn't be at a 39% unrealized loss. Just not sure how this is possible.
 
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HornPorn

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Wait a minute......you've been accumulating these assets in retirement accounts for 20 years and they're sitting at a 39% unrealized loss????? How is that possible? What are they in, and have they always been in those assets?

Even if you put all that money into the market at the peak back in Nov 2021, you still wouldn't be at a 39% unrealized loss. Just not sure how this is possible.
No, not 39% loss from my originally invested money. I reallocated in Nov 21, and am 39% down from that.
 
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HornPorn

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Even if you put all that money into the market at the peak back in Nov 2021, you still wouldn't be at a 39% unrealized loss. Just not sure how this is possible.
Many stocks are down 80%+ from their highs. Glad you are not aware of this, for your sake
That's a rough go. What asset is down that much since 11/2021?
Here are a few for you:
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Marble

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The mistake I see in the investments above is the majority appears to be in individual stocks which are the most volatile. Since they are in the tech sector it is worse. Growth mutual funds are less volatile so I would consider that.

If you pull out money and it is taxed, and then use it for renovation of your home, it would be like getting a loan and paying that interest rate on it. So basically paying a premium to spend your money. You would be better off getting a loan.

I wouldn't and haven't pulled money from mine for something like that or anything else.

I'll find another way to pay for something that doesn't cost as much.


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schmalzy

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Agree with the sentiments of riding it out. Pulling it out now guarantees that loss. Strong chance of it recovering significantly.

Self managed?


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HornPorn

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Self managed?


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I manage this account, yes. I manage many different accounts, some with very boring asset allocations (JNJ, 3M, KO, etc.) that are doing just fine, but those accounts have different purposes and obligations. This particular account I intentionally took an aggressive and highly concentrated position in a couple of sectors.
 
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