With An Economic Collapse Likely, Should You Still Invest In A 401K?


You don’t need an advanced economics degree to figure out that the global economy is in some pretty big trouble. The market crash of 2008, in my opinion, was only a brief preview of what’s coming in the next few years.


You can call it an economic collapse; economic shift or any other name you want to, but the fact is that the US economy simply cannot sustain itself much longer. We’re running on borrowed time and far too much borrowed money. Continued economic manipulation by the Federal Reserve and Washington has pretty much guaranteed that the dollar will continue to lose its value at an alarming rate.


What this means for common Americans is that the cost of pretty much everything is going to continue to rise and will continue rise sharply year after year. For most Americans, household incomes will not be able to keep up with the rising costs of living and before long; the middle class is simply going to cease to exist.


After 2008, people are worried about their investments and whether or not they will even have enough money to live on after retirement. This is not only a justified fear, but it’s probably much worse than most people even realize.


Many Americans have invested in 401K retirement plans for years to prepare for retirement but does it still make financial sense to continue to put money into a 401K when we’re on the edge of one of the worst financial disasters in history? Today we’re going to weigh the pros and cons and find out.


Should I continue to invest in a 401K account?


The Pros


  • 401K accounts are still one of the few tax-deferred investments left. It’s taken out of your paycheck pre-tax and you are only taxed on the lump sum or payments that you receive once you retire.


  • Although there are some pretty steep fees for doing so, you can withdraw money from these accounts either permanently or with a repayment program.


  • No one really has any real clue what the market will be like tomorrow, let alone years from now. Although it’s nearly impossible that the economy can repair itself and avoid another market crash(es), we still don’t know. It could be that a 401k could turn out to be one of the safer investments out there.


  • There is still a lot of diversity when it comes to 401K accounts. Usually there are numerous funds with varying amounts of risk for you to choose from.


The Cons


  • There are step penalties for withdrawing money from your 401K account before you are 65.
  • 401K accounts are slowly starting to come into the crosshairs of even more government regulation. Every year there are fewer investment options outside of government bonds. If this trend continues (and it will) before long a 401K account will really be nothing more than another form of government-ran social security, and we all know how well that program has worked out.
  • There are very few 401K plans left that offer a cash option. You used to be able to pull out your invested funds in your 401K and put them into a cash option whenever you wanted to. Basically this meant that you could put your invest on “pause” by pulling out of any funds you wanted to and just letting your money sit. Now, investment companies aren’t offering this option anymore. Basically, if the market crashes, there is no safe haven for your money, except in government bonds…. but hey, the government always pays its bills right? Guys? Hello?


Guys and gals, just to be clear, I am not an investment banker, and you shouldn’t be making any sort of major financial decisions based on articles on the internet. All I can do is offer my opinion and what I’m personally doing.


I don’t invest my own money in a 401K, not anymore. Since the cash option was taken away from my investments I have no longer continued to contribute to that investment. The money I’ve invested in the past and the employer matched contributions are still there, collecting at least some form of interest; but I don’t foresee adding anything more to it for quite some time if ever again.


I can’t predict the next market crash and neither can anyone else. However, what we can all do is make basic financial preparedness decisions that can help mitigate the risks of an economic collapse if it does happen. This means not putting all your eggs into one basket and (being he preppers we are) PREPARING FOR THE WORST.


There are hundreds of types of investments out there. You don’t have to be limited to using a 401K or nothing. Investments like precious metals, digital currencies or other, more common investments are great options to help you hedge your bets against an economic downturn. Are they risky? Absolutely; but based on the economic forecast over the next few years, the stock market, bonds and mutual funds are just as risky, if not more so.


It’s really up to you how much risk you’re willing to take with your retirement and whether or not you still want to use a 401K. Whatever you decide, do your research, care about your investments. Don’t make investment decisions based on what someone else says. Learn where your money is going and how much risk you’re taking, and then make an informed decision based on how comfortable you are.


Thank you for reading today, stay safe our there everyone!



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  1. Bob

    In the statement “There are step penalties for withdrawing money from your 401K account before you are 65”, the actual age is before 59.5.

    1. Anon

      I was laid off just before my 57th birthday and was able to cash out my 401(k) without penalties once I turned 57. I had to pay federal and state income taxes at the maximum rate, but got some of that back in my refund at the end of the year. I think I could do this only becasue I was no longer employed by the company. I moved the money to physical silver.

  2. Berneck

    It’s worth noting that any amount that your company matches is usually eligible for withdrawal into another qualified retirement account. A company match is not a contribution. Every year I take whatever funds were matched, and move them into a commodities IRA. I’m not sure if this is something you can do in every plan, but the vast majority of people are unaware that this can be an option. For obvious reasons, the people running your plan don’t want you to know about this. Call your plan administrator and ask them specifically if you can roll over company match funds into another qualified plan. If you ask any other way, they could skate around the issue and lead you to believe it can’t be done. It happened to me, but I knew better.

    Also, I would not necessarily cease all contributions to a 401k, ESPECIALLY if your company offers a match. You are literally turning down “free money”. In most cases you cannot make the same kind of “return” you get from a company match. Make sure you understand exactly how much your company will match. I’m sure terms vary immensely from plan to plan. My plan offers up to 5% of my annual salary. So if someone makes $50k, the company will match up to $2500 as long as they contribute $2500. If they don’t contribute that amount, they won’t get the full $2500. That’s literally DOUBLING what they contribute. If you have favorable company match terms, you should contribute the minimum required to get the FULL company match amount. Couple that with the ability to roll that money into another IRA that you have much greater control over, and you’re crazy not to do it.

  3. Bernard

    I took the penalty fees and cashed mine out this year. Matress money is the way to go.

  4. Sid

    Solution: Self-directed IRA with checkbook access. You have to set it up correctly, but your IRA/401K cash sits in your local bank. You can invest in property, gold, silver, businesses, or leave it sitting in cash. There are restrictions in how it is used (no numismatic valued coins, can’t invest in your own business, can’t fund housing that you or close relatives live in, etc), but it works. Do a Google search on “self-directed IRA with checkbook”.

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