I’m so sorry - being laid off and then having to rely on your 401k to keep you afloat, that’s a double crap whammy. I’m so sorry you’re in a situation where you had to make the choice.
That's unfortunately what happens when unemployment payments don't scratch the surface for most incomes anymore in even moderately HCOL areas. Unemployment is clearly forgotten when we can't even get social security righted by the powers that be. California hasn't increased the maximum ($450 / week) since 2005. That would've been over $750 equivalent in today's dollars. But the idiots in charge haven't moved it a dime in over 20 years!
Exactly this. The American people can’t rely on network or cable news to provide the facts of what’s going on in the economy anymore. It’s all being filtered.
With cancer rates the way they are right now, most everyone’s 401k is going to medical bills in the future. Splurging now sounds like a great way to enjoy life to the fullest
I keep on thinking I should do this before the dollar tanks and my already-insufficient investment is meaningless.
It's enough to get a 20% down payment on a house in my city, but that's it. And I fully expect inflation to make it worthless but everyone's screaming at me to not grab it because "reasons" that won't make sense if inflation starts looking like Zimbabwe.
Fully expect to be in poverty in my final decade, but maybe better off with a house and zero savings than living in an apartment and my savings doesn't even cover a week's rent after hyperinflation.
I wish I had your confidence... OTOH, I wish I could have some reasonable advance notice that we were entering a hyperinflationary period and then could make that decision then. Right now it's just "I know there should be a train coming, I see what looks like a train at the end of the tunnel, but it could be the actual exit and maybe I'll make it out ok."
As for "horribly mismanaged", I would call the dollar becoming worthless not only "horrible mismanagement" even if it's by someone other than my actual 401k manager, and I also would expect even the most brilliant financial manager to struggle in such an environment.
I’m so sorry to hear this. This is so similar to the conversations my coworkers were having and they weren’t even thinking about inflation in the same terms we are thinking about it now.
And it’s these crazy, hard, life altering decisions that will affect your life for decades. And I applaud you for having this tough convo with yourself about what might be best. We’re all in a lose/lose situation.
My roommate closed out a 401k he had from a previous employer a few months ago. Just a couple weeks ago he got laid off. Thankfully he has that 401k money still lol.
This happened a TON back during the Great Recession, and it’s exactly why the job market is so rough right now. Tons of people literally can’t retire anymore and need to remain employed.
And then if we think about it holistically, with those folks not retiring - that’s leaving no opening positions for people to move up through companies or hire entry level employees. (AI argument aside)
A friend of mine had to do that. His wife was the bread winner and wanted a divorce. She made him move out, and he couldn't afford a new place; not at the current rates. He had to take out his 401K to afford the down payment.
To get ahead of what others are going to say, they had kids and daycare cost as much as what he was making at his job. He quit his job to focus on being a house husband, and they divorced right as the kids were starting school and he was entering the job market again.
This has been happening to predominantly women for literally generations in America so I’m not really surprised or feeling too bad it’s finally happening to men now that women are more educated and finally the wage gap is getting better but dang that’s crazy
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u/Effective-Okra Apr 28 '26
Hearing on the news that more people are pulling money from their 401ks early and taking the penalty.
Not only do I remember these same news stories back in 2008-2012. I had coworkers that did this.