401(k)s Hit by Withdrawal Freezes!

Investors Cry Foul as Some Funds Close Exits; Perils of Distressed Markets

For those of you waiting for the other shoe to drop...

If you still have money in a 401K employer controlled plan I strongly suggest you read this article and make sure that your money is safe. I am not trying to scare anyone...just that I have known this has been going on for at least a few months and was waiting for the reporting to show up in the mainstream media.

Well here we have it...from none other than the Wall Street Journal.

If you are thinking about ignoring this warning...dont!

Some investors in 401(k) retirement funds who are moving to grab their money are finding they can't.

Even with recent gains in stocks such as Monday's, the months of market turmoil have delivered a blow to some 401(k) participants: freezing their investments in certain plans. In some cases, individual investors can't withdraw money from certain retirement-plan options. In other cases, employers are having trouble getting rid of risky investments in 401(k) plans.......

.......The withdrawal restrictions are limiting investment options for plan participants and employers at a key time in the markets. The timing is inconvenient for the number of workers like Mr. Dursky who are laid off and find their savings inaccessible.

Though 401(k) plans revolutionized the retirement-savings landscape by putting investment decisions in the hands of individuals, the restrictions show that plan participants aren't always in the driver's seat.

online.wsj.com...

[edit on 5-5-2009 by burntheships]

reply to post by burntheships

The hole just keeps getting deeper. The monetary system of this country is just screwed. The people are going to squeal loudly when their 401's are emptied.

Shortly after I got laid off I was notified that my companies 401K plan was going into a 90 day no action phase. I cashed that puppy out just in time.

Yes, the penalty hurt, my mattress is lumpy from all the cash that's under it, but bygolly at least I still have it.

I am honestly starting to believe that the banks are now trying to strip everyone of every last dime they can get their hands on.

Interesting times we live in,

reply to post by mrwupy


Good for you! Sad thing is...some folks are so trusting still...and just have a hard time accepting that it is a different game now!

I listen to an local news station...with some local investor guys every weekend. Lately the trend is at least one caller every hour reporting this same thing. Curious thing...the first time I heard a caller report this, the host was almost silent...he had a hard time responding to it and finally took the call off the air. I had a sick feeling from that. Now I know why!
I hope everyone reading this takes action if you still have a 401K.

And I am wondering if they are not going to freeze the pension funds next! Really...not trying to scare anyone, just putting it out there!

This is the shot to the masses we need for massive awakening. If you tell people they can't have what is theirs. They start looking for answers why.

I wonder whats going to happen when I make that phone-call in a few weeks here. I am so out, and I will cry if I am told, Ohh, you have to wait till January 1st of 2010.

Yah, like it will be worth anything then...

You heard the saying, whats Mine is mine and what is yours is mine.

Well that is how the banks think, and how the government now thinks.

All the money that we make, they already consider as theirs so they think they have the rite to have it.

Ama

i pulled my 401k last year before it lost to much of the value i had in it. i took a pretty big hit with the penalty and taxes on it but atleast i still had just over half of it after wards. My mom was laid off a couple weeks after i pulled my 401k so she pulled hers she was lucky, because of her age she didn't get hit with the penalty but she lost almost half of hers.

People should have listened to myself and others back in Sept. and Oct when we warned about what was coming. I'm not going to gloat and say i told you so, But now maybe you will start listening to warnings.

do not ignore the warning in the OP. if you have a 401K i would seriously consider drawing that puppy out using some of the money to get stocked up on necessities and barter items and save the rest. don't go out and blow the whole wad on that big screen you've been wanting! Buy the true necessities!

It never hurts to be prepared for the worst and hope for the best. if things blow over in a few years and life truly gets back to normal you can always reinvest your money in your retirement plan.

reply to post by Mercenary2007


I moved all of mine into a stable value fund last May when I saw the markets getting weird. I warned everyone at work and not 1 person listened.

October rolled around and they said they wished they had listened.

I pulled a loan out on my 401k in January, knowing I was going to get laid off in February. They dont make you pay on the loan while you are laid off and now I have been able to survive. They locked all of the 401ks down were I worked in February.





[edit on 5-5-2009 by pcgeek]

I was laid off in November - and took out what I hadnt already lost in December. Big penalties, but if I had left it there it would have dwindled down to almost nothing. I paid off all my debt with it and saved a little bit... got a new job in January, so at 42 I am pretty much starting over... but with no debt (except student loans). I have had no regrets about pulling it out considering what was and still is happening.

reply to post by burntheships


During the summer i checked my ma's retirement fund and noticed that she had lost $800. in two weeks time. During that one month she had lost over $1,000.

I had her take it all out, (didn't want to because i knew she'd blow it) but i'd be damned if i was gonna tell her to leave it in there so someone else could blow it.

Once i saw her money disappearing like that i knew something was going wrong, i'm glad i told her to take it out. At least she got to spend her money, and it wasn't used for some CEO's golden parachute

Reply to all...
One can do a roll over with out penaltys. There may be some fees associated with a new plan but IMHO that would be better than letting taking a chance.

If I remember correctly all of the calls I heard were about problematic employer controlled funds. Most of the time to withdraw, or rollover you must have signatures from the plan adminstrator. That can take a week or so just to get an appointment! If you are concerned, do not wait to take action.

Another thing...if you think your employer is having financial troubles and they are holding money out of your wages to direct deposit to your acccount...make sure they are doing just that!

reply to post by burntheships


this is completely outrageous!

All the things I want to say about it, I can not due to T&C's!!

How in the H--- are they allowed to keep money from people? Is there some fine print in joining it, that says you are not allowed to take your money out, if we don't want you to?

BS!! This is exactly what is wrong with this whole global meltdown! ONLY the big guys have the money all the regular people are getting screwed!

People who have worked hard and given their money to the investment pools for retirement - should have access without restrictions to their hard earned money!

Lawyers need to get involved here, and EVERYONE who wants THEIR retirement money should be able to get it immediately!

Isn't that what 401Ks are about anyway? Money there when you need it for retirement? Plus the people asking ARE retired, from what the article implies.

This kind of s--- is what makes me soooo upset - the regular people keep getting F ed over by the big corporations. The Big corporations are the ONLY group being protected now, the rest of us - it is a BIG F - U from the government and big corporations!!

An honoest question to everyone- Do you believe that this financial meltdown is ultimately going to lead to the collapse of the monetary system. Or- Do you believe that there is a chance our economy will recover and limp forward into a more sustainable state due to good thinking.

The latter seems like only wishful thinking, and decided what you believe of the two is a definate factor in determining what you want to do with your economic future, any opinions? I might start a new thread for it.

BTW this is completely propesterous that this is happening to people, but its only one of a few things that are happening.

I believe this first came out in the 'financial' world about 6 months ago.

Wonder what took so long for the 'folk' to find out?

One seems to be full of wonder at the time, no?

When one shows you two options, show them your third.

Show and Tell them who they work for.

You.

very good post for the people that still trust this financial institution! i would highly recommend anyone that is thinking about starting a 401k or that thinks they too can become a millionaire in the stock market, too sit out for a few years or until our countries monetary system figures out what it is going to do. As over a year ago i had several short sales of autozone and i had scottrade tell me the day before it started going down in price, that i had to sell my short sells out. i was dumbedfounded as i was told no one owned any shares of autozone. so my question was if no one owns any shares then the stock should plummit right? and thus my reason for short sales. regardless of my claims he told me to sell my shorts. that day is the time and day that i realized that this supposed wall street is a scham.

as one maphia agent replied in a court of law to the judge said, " we can not keep up with the government".

Originally posted by mrwupy
Shortly after I got laid off I was notified that my companies 401K plan was going into a 90 day no action phase. I cashed that puppy out just in time.

Yes, the penalty hurt, my mattress is lumpy from all the cash that's under it, but bygolly at least I still have it.

I am honestly starting to believe that the banks are now trying to strip everyone of every last dime they can get their hands on.

Interesting times we live in,

For five years I worked with retirement plan administration, specifically 401(k) plans. I warned my husband back in October 08, to cash in one of his previous 401(k) plans. Unfortunately he didn't listen and has now suffered a 45% loss in total value of the account. So much for hoping for the best.

reply to post by tatersalad


Sounds like you got 'bumped' for someone else. A broker can only lend you shares to short if they have the shares in their inventory to short in the first place. They most probably over-sold their short positions and gave yours to a 'fellow'. Fleeeeeced though you're certainly not alone which makes it somewhat more tolerable I suppose. Common practice within the industry. Broker admits no guilt, pays small fine, no jail time, no conviction. The best part of all ...are you ready folks?....the broker gets to Retain the funds they just stole from you and pay a tiny cash out settlement for damages. Crime did pay, and quite well in the brokerage industry though that is no longer an option. In the future, perhaps you could get it back? Why not? It's still yours, is it Not? This is what the courts are for. I suppose if the 'people' hire alot more judges to oversee 'real' cases, I suppose the people could have their date in court. The 'Statutory' legal system serves the interest of another, not the people. It's authors are it's benefactors, no?

Oh I suppose I could go on for days about this kind of 'news' though I'd rather not. You don't want to hear it. Really, you don't.



[edit on 6-5-2009 by Perseus Apex]

I feel sorry for the countless people who bought useless and utter crap throughout the years.. Now that unemployment and foreclosures are rising at an alarming rate, people are beginning to realize that the days of America the Great are fading and reality is sinking in.. Sadly, it has to take them to the point where they lose their job and house and have to move into a shelter or one of their family members homes before they realize that they should have been smarter with their money.




[edit on 6-5-2009 by doorbell412]

reply to post by doorbell412


umm....ya, only, investing in your 401k was the smart thing to do now, wasn't it?

seems like this "oh, they should have worked harder, oh they should have been smarter" and all that is used to justify not feeling any sort of compassion on people when they fall on hard times seems to be blown out of the water....

like maybe it rains on those "hardworking", "educated" smart people also?

reply to post by doorbell412


Then again 'inside' information never hurt the Brokers now did it, though Martha can't claim the same. Wonder if the NSA knew about Martha before Martha knew about them?

Martha? oh Martha.....you were just in the wrong scene at the wrong time...though you commit the crime it is but worth a dime to those who took the bank.