Is this a bad idea? Yes, I am being paranoid about the world financial crisis.

[cupcake]

I withdrew some money from my 401(k) a couple months ago to put in a savings account as a cushion in case I needed money while I wait to file BK. Seeing I would no longer be able to use my CCs and I had no other available cash, it was something that I needed to do for my own peace of mind. I have no relatives in a position to loan me money for anything, even a small amount. I spoke with my attorney prior to making the withdrawal and I will be able to exempt any/all of the money when I file. I deposited the money in a regular every-day savings account that earns practically no interest. So, I have this money just sitting in my savings account to use in case of an emergency (car repairs, etc.). Also, it was a cushion for me when I had a couple unexpected expenses come up.

The world financial crisis has me all paranoid and I don't know the financial status of my bank. Quite honestly, I feel like any given bank could fail at any time. While I know that the paltry amount of money I have in my savings account is insured through the FDIC, I am still a little freaked out.

Would I be a complete moron if I withdrew all of my money and kept it at home in a fire-proof safe? Also, if I did that, would it look odd to the trustee when, in four months, I file for BK. We are not talking about a large amount of money by any means. However, it's a lot to me because it's all of the disposable cash I have; to anyone else it wouldn't mean much.

[fltoo]

Keep the money presently in your savings account if the amount is exempt. Sounds like it gives you peace of mind.

No, do not withdraw any money you don't need from your 401K. Matter of fact, if you are young, keep contributing to the 401K.

If the economy collapses, the dollar won't be worth anything anyway.

[cupcake]

The money that is in my savings account is money I withdrew from my 401(k) two months ago. Yes, I did it for peace of mind and I am not regretting my decision whatsoever.

I am just paranoid about keeping my savings in a bank account. I just feel like my savings cushion would be better off in a fireproof safe than in a financial institution.

[bkrelief22]

Cupcake...don't know if this will help but you can go to bankrate.com and check out which banks are 'safe and secure". On the right side of the web page I think it asks "Is your bank safe and secure?" or something like that. Click on it and you fill in the state, name, etc. and you will see the rating they give for it. It helped me chose which bank to use.

Good luck and relax!!

bk22

[JRScott]

The question is what age are you?

Frankly the market is going to tank no matter what they do, you cannot sustain the American economy as it is.

Keep in mind as a 401k asset the money is exempt in any bankruptcy filing. Therefore it is not wise to convert an exempt asset into an asset that may not be exempt.

In the short term your 401k will lose money in the next 2-3 years. However after that it should start to recover. 401ks and similar investments are long term investments, not short term ones.

[cupcake]

Cupcake...don't know if this will help but you can go to bankrate.com and check out which banks are 'safe and secure". On the right side of the web page I think it asks "Is your bank safe and secure?" or something like that. Click on it and you fill in the state, name, etc. and you will see the rating they give for it. It helped me chose which bank to use.

Good luck and relax!!

bk22

Thanks for that site address. According to that site, my bank is not doing very well!

[cupcake]

The question is what age are you?

Frankly the market is going to tank no matter what they do, you cannot sustain the American economy as it is.

Keep in mind as a 401k asset the money is exempt in any bankruptcy filing. Therefore it is not wise to convert an exempt asset into an asset that may not be exempt.

In the short term your 401k will lose money in the next 2-3 years. However after that it should start to recover. 401ks and similar investments are long term investments, not short term ones.

I am 36 and I expect to work until I am 65 or so. Currently, my employer contributes 7.5% of my annual pay to my 401(k) and I contribute an additional 2.5%.

I don't intend to withdraw any additional funds from my 401(k) unless I have an absolute emergency and, even so, I can't see needing more money than what is presently in my savings (from the 401(k) withdrawal I mentioned above). I have no assets of value and no home so I will have no problem exempting the money currently in my savings.

[woeisme]

I keep my savings in a firesafe in my house. Not much, just a few thousand, but don't want it in the bank where creditors or trustee or others can see it. So I do what you are suggesting, keep money in a safe instead of bank, but for a different reason.

[No Gravy]

The money that is in my savings account is money I withdrew from my 401(k) two months ago. Yes, I did it for peace of mind and I am not regretting my decision whatsoever.

I am just paranoid about keeping my savings in a bank account. I just feel like my savings cushion would be better off in a fireproof safe than in a financial institution.

For what my opinion is worth, I don't think you can be *too* paranoid right now. Though rather than hording paper money, I'd be buying canned goods and stocking up on non-perishables. But that's just me.

As for deposited funds, remember they're insured up to $100k. Assuming the government doesn't go BK too.

[JRScott]

I am 36 and I expect to work until I am 65 or so. Currently, my employer contributes 7.5% of my annual pay to my 401(k) and I contribute an additional 2.5%.

I don't intend to withdraw any additional funds from my 401(k) unless I have an absolute emergency and, even so, I can't see needing more money than what is presently in my savings (from the 401(k) withdrawal I mentioned above). I have no assets of value and no home so I will have no problem exempting the money currently in my savings.

You'll have to work much longer than 65. My estimate is that probably the Social Security will be revamped in the next administration, not because the politicians want to but because they have to.

I'd suspect those born before 1953 will still collect at 65. Those born between 1954 and 1968 will collect around age 70. Those born after 1968 will be reset to life expectancy at birth + 3 years.

Planning for your own future though you might could retire earlier and it seems you are working on that. With approximately 30 more years to let your fund grow I'd just let it grow, continue contributions and know that long term you'll be okay.

[oopsnow]

Born before 1953

I agree that Social Security will have to revamp their retiremant schedules what with the amount of money they are giving away.

I was born before 1953 and my schedule, per the letter I get each year from S.S. says I can retire with 100% retirement when I'm 66 years and 6 months old. If I retire before that the % goes down. The earliest I can retire is 62.

[BROKENN]

And I get my report of XX a month at XX an age. I don't count on it.

The only good part, we Generation Jones' (heehee JR), have had a joke since I was young.... what SS $??

We already knew it wouldn't be the same...........

But, I always made myself feel better that I was helping my Grandma pay her bills

[JRScott]

I agree that Social Security will have to revamp their retiremant schedules what with the amount of money they are giving away.

I was born before 1953 and my schedule, per the letter I get each year from S.S. says I can retire with 100% retirement when I'm 66 years and 6 months old. If I retire before that the % goes down. The earliest I can retire is 62.

Well with folks living longer they basically have to readjust. We simply can't afford to pay SSI for what might end up being 1/4 to 1/3 of someones lifespan

[JRScott]

And I get my report of XX a month at XX an age. I don't count on it.

The only good part, we Generation Jones' (heehee JR), have had a joke since I was young.... what SS $??

We already knew it wouldn't be the same...........

But, I always made myself feel better that I was helping my Grandma pay her bills

It does help them, in olden days you would have taken them into your home and cared for them , or lived with them. Still it does help them

[No Gravy]

It does help them, in olden days you would have taken them into your home and cared for them , or lived with them. Still it does help them

And now the tables have turned, and many of us are helping to support (if not outright supporting) our kids and grandkids. *shrugs* Family helping family is better than expecting the government will provide for us, anyway.

All I can say is, it's a darn good thing I love what I do for a living...cuz I can never afford to retire