Personal Finance and Investing

etc. , not just equity mutual funds. Some people equate mutual funds with equity mutual funds, and that's not true.

This isn't meant for you Bif, as obviously you know that given your rate of return over multiple decades,

but there is a LOT of confusion out in DU-land, unfortunately. It's frightening what I've been reading in the last few days.

Another one I see a lot here on DU is equating the term "401k" with stocks (aka equities). AFAIK it is exceedingly rare when a 401k is stock funds and stocks only. Almost all offer other than stock stuff, such as fixed income alternatives like bond and money market mutual funds and FDIC-insured CDs .

Another one -- someone has been bragging about "withdrawing everything from" their 401k, because they "don't want to be the last one left holding the bag". I've implored them to realize if it's a traditional 401k, they are going to pay taxes on their withdrawal and help out Krasnov, as if paying tariffs (taxes on imports) isn't enough of a windfall for Krasnov. And one can avoid the withdrawal and taxes by shifting to safer alternatives to stock funds WITHIN the 401k.

With Roth 401k's, if one withdraws everything from that, there's no tax, but one has eliminated a completely tax-free account (tax-free accumulation, tax-free withdrawals, tax-free period). One does not throw something like that away without the utmost consideration.

If one has a 401k with too-limited choices of safer alternatives, the thing to do is explore rolling it into an IRA, which will generally be tax-free if done properly. Ones from Vanguard, Fidelity, Schwab, etc. and etc. have a huge number and kinds of choices.

Another one talks about having come into a substantial amount of new money and "putting it back in their IRA". Well, you don't just put money back into an IRA. Once it's been withdrawn, it's been withdrawn. Putting money into an IRA from a regular taxable account is limited in amount (annually the limit is something like $7000 + $1000 "catchup" for over age 55 or 59 or whatever it is) and one must have earned income (from wages/salaries or self-employment) of at least that amount. Otherwise, one pays an excess contribution penalty.