Thoughts on Liquidating Retirement Accounts

schmalzy

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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.

Have a similar set up with similar risk profiles and have about the same loss. That one, the aggressive highly concentrated, is managed by someone and was exceptionally profitable up until tech nose dive.

Anyway to pull a home equity loan instead? Just an idea, and it may not make sense for you, but being that your investing into the home to tap into more equity that improvement would bring any be worth considering.


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HornPorn

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That one, the aggressive highly concentrated, is managed by someone and was exceptionally profitable up until tech nose dive.
Yeah those names were all crushing it from March 2020 to Nov 2021. Cathie Wood and everyone following her (including me) were feeling pretty good there for awhile

Will definitely have to think about the home equity loan. Have never considered it.
 
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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.
I wouldn't necessarily say individual stocks are poor choice, but tech stocks are as you said volatile. Individual stocks can be very stable depending on the industry. ALWAYS look for stocks that pay dividends. I have some stocks that OVERALL I have lost money on the investment itself but after holding it for a couple years, the dividends have exceeded my initial losses

You are however correct about mutual funds and now EFT's being less volatile but just do your homework. Honestly its why a lot a people pay someone to manage their investments.
 

Riplip

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What is your reasoning for wanting to sell? Fear of further downside, do you need the money immediately? Sounds like you need to adjust your risk tolerance. If you have already made your mind up to sell, you should at least understand the principals of tax loss harvesting so that you can use the losses to offset gains in other areas. There are limits that you can use annually but they can be "rolled" over year to year if not used.
 
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What is your reasoning for wanting to sell? Fear of further downside, do you need the money immediately? Sounds like you need to adjust your risk tolerance. If you have already made your mind up to sell, you should at least understand the principals of tax loss harvesting so that you can use the losses to offset gains in other areas. There are limits that you can use annually but they can be "rolled" over year to year if not used.
Pretty sure you cannot roll capital losses in a retirement account.
If you take distribution of a pre-tax source before age 59.5, you'll be lucky to pocket 50% of the market value....Compounding the loss.
I would stop listening to whatever this advisor/newsletter/stock guru is pumping and go with a diversified mutual fund.
Alternatively, you could learn option trading.
 

SDHNTR

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No random person on an internet site can give you suitable advice. And there is some genuinely bad advice being tossed around here! You need a financial plan with defined and quantified objectives, and an investment strategy designed to accomplish the goals laid out in your plan. If you are asking these questions already, I can tell you’re guessing and this stuff is too important to speculate on junk stocks or leave up to chance.

Yes, I do this for a living, have for 24 years. Get some help and do it right.
 

SDHNTR

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What is your reasoning for wanting to sell? Fear of further downside, do you need the money immediately? Sounds like you need to adjust your risk tolerance. If you have already made your mind up to sell, you should at least understand the principals of tax loss harvesting so that you can use the losses to offset gains in other areas. There are limits that you can use annually but they can be "rolled" over year to year if not used.
You can’t.
 
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HornPorn

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No random person on an internet site can give you suitable advice. And there is some genuinely bad advice being tossed around here! You need a financial plan with defined and quantified objectives, and an investment strategy designed to accomplish the goals laid out in your plan. If you are asking these questions already, I can tell you’re guessing and this stuff is too important to speculate on junk stocks or leave up to chance.

Yes, I do this for a living, have for 24 years. Get some help and do it right.
Yeah, if you read my original post, I just wanted to hear from anyone who had done it. Seems like no one has. The question was not "should I or should I not and why?"

I can parrot all the reasons not to sell retirement assets. Also didn't ask about asset allocation or concentration. The question would be the same if I was up 800%. I am licensed through FINRA, have passed a couple of exams including the S7......

Seems like a few people learned a few things, so it was a good exercise. Some people didn't know that you can lose more than 39% in the stock market.
 
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HornPorn

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Your biggest mistake might be relying on Rokslide for financial advice.
Relying?....hardly .Im guessing the life of everyone on the Slide has a financial component to it. Its the one thing we all have in common besides being humans. Im guessing the vast majority pay a mortgage every month....many also probably have truck payments. Nevermind credit card balances, 529s for the kiddos. Some may have inherited money from passed relatives. Some probably have cashed out of retirement accounts. So I don't see what is wrong asking if someone has done something, and what their experience was. Whether or not they would step forward on this thread to say that they did is another question.

Lots of assumptions get made on this board, and in this thread. No idea of my net worth, debts.....maybe I have a team of CFPs, CPAs, estate planning lawyer, and simply wanted to see what other people's experience has been. Maybe these accounts represent 5% or less of my liquid assets. Maybe they are 100%.......based on some of the posts, seems many people think that.
 
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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?
I did it. 10 years ago. For medical bills. I’m trying to put it back now. My advice is to hold on to it.
 

Kenn

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It's a little hard for me to imagine that you passed a series 7 and are asking for financial opinions/advice here. Maybe I sold all my retirement accounts years ago and made a fortune on Bitcoin. Would that experience help you?
 
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HornPorn

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It's a little hard for me to imagine that you passed a series 7 and are asking for financial opinions/advice here. Maybe I sold all my retirement accounts years ago and made a fortune on Bitcoin. Would that experience help you?
Maybe one day I'll be as wise and successful as you. Doubtful though.
 

SDHNTR

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Yeah, if you read my original post, I just wanted to hear from anyone who had done it. Seems like no one has. The question was not "should I or should I not and why?"

I can parrot all the reasons not to sell retirement assets. Also didn't ask about asset allocation or concentration. The question would be the same if I was up 800%. I am licensed through FINRA, have passed a couple of exams including the S7......

Seems like a few people learned a few things, so it was a good exercise. Some people didn't know that you can lose more than 39% in the stock market.
I did read your original post and if your intent was not to decipher “should I or shouldn’t I”, well, then, I’m not sure what your intention was with the post to begin with. I’m still confused by it. Are you looking for someone to tell you it’s a good idea?

What value is there in someone telling you that they have taken an early withdrawal? There is no work around. No secret to it. No hack. The taxes and the penalty absolutely will apply. I don’t think you are going to hear anyone say, “I did it, coughed up the taxes, paid a 10% penalty, took a huge loss, and am glad I did!” In nearly 2 1/2 decades of doing this professionally I’ve never heard anyone say that, so I don’t think you will on an Internet site full of hunters.
 

jblam

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The loan option is a great choice, if allowed by the plan administrator. Lets you keep your money at the casino (market), and you are paying yourself interest, so technically you can “contribute” over the maximum amount allowed.
 

Beendare

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Yeah Doc nailed it with the loan…but in your case I would talk to a pro as there is too much tax consequences.

FWIW, thats about the riskiest list of investments a guy can own.
 
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