What will happen to our 401 k if the stock market totally crashes? On BBC World news the news is not good?

[Massachussets Meltdown]

So what if it goes way down and the economy does not get better, ?
What happens to the 401 K ?

[Pauly]

Your 401K will not be worth a lot at the moment, but you have to realize the only time your 401K value really matters is when you retire and take it out.

Theoretically, we would all like the stocks to be cheap when we are putting money in, and expensive when we take the money out.

Keep in mind, that over the history of the stock market, the stock market has never lost money in a 20 year period. The stock market will always go up and down, but the general trend will be that it will rise. If you are young, you should not be worried, in fact, now is a good time to invest more money.

If you are reaching retirement age, it is more of a time to worry.

Hope this helps.

[Comrade]

It will go to ZERO just like the banks stock.

[m1a1mikegolf]

I would not worry too much about the money in your 401K. People make the mistake of panicking when the price of a share of stock drops and sell it at the low price. As long as you hang on to that stock you have not lost any money. If you do not need the cash there is no reason to sell the stock at a depressed price and it is better in the long run to simply let it sit.

The thing to remember is that there is a business cycle where recessions tend to occur every 7-10 years. These recessions last 1-4 years then things recover. So the trick is to be able to 'ride out' the bad times and profit from the good times.

[JUAN FRAN$$$]

In the short haul like right now the value of your 401K may crash since it is in stocks. Note I said may:
But that depends on how diverse your 401K Portfolio is:
There are still a lot of companies out there going great guns wide open and growing:
Over the long haul it will rebound right along with the stock market.
I watch the stock prices of companies in my local area and they are still rising in value. or staying roughly the same.
In spite of the automotive plant laying off we still had a positive growth in jobs. It would have been a lot higher if the automotive company hadn't started laying off.
Retail stores in my area also showed an increase in Christmas sales over last year.

[kearneyconsulting]

It depends, of course, in what you are invested in and how diversified that you are. If the stock market totally crashes and you are invested only in stocks then you will have a significant unrealized loss in your 401-K. My guess is that this is a good time for you to analyze what you have in your portfolio and compare it to what should be in your portfolio.

Good luck.

[rotorhead]

401k will suck. That's why you should have a diverse portfolio.

Liberals point this out as an example of how it would have been a disaster if you had put 2% of your social security contributions into the stock market.

But if you are under 45, the chances of there being any SS by the time you reach retirement is pretty thin. Besides, the Fed Gov controls when you can get your SS benefits. Have you checked recently how old you will have to be to collect full benefits? Whatever they are, add 2-3 years to it. They will raise the age by the time you get there.

If you want to retire before you are 67, you need to start your own retirement fund. Remember, these are long term savings and investments. You aren't saving for a car. The market always comes back. Look at it this way, if you are investing now, you are buying into the market when it is low. When it recovers in a few years, you will stand to do well. I wish I had been investing more heavily back when it was at 3500.

401k/retirement funds are for the long run. That is, 20-30-40 year investments. The market always recovers.

Take whatever you hear on the BBC with a large dose of salt. They are the doom and gloom Socialist news source of the world. Pity, they used to be something at one time.

[neuroticwilly]

remember one thing: the press isn't happy unless you're unhappy! they think they really are the fourth estate. if you don't believe that this country could function without the press. ask one of them!! that might explain why left wing newspapers are tanking all over the country, why liberal talk radio thinks it needs the fairness doctrine can to save them, and why NBC/MSNBC ratings are in the toilet!! they don't get it! no one wants to listen to their liberal crap, apparently not even the liberals!

[stock-man]

stock market cant totally crash under any circumstances . moreover things are showing signs of improvement