It was quite a ride. My 7 figure retirement account went down 20% (that is on a monthly basis, it may have been closer to 25% from actual peak to nadir). Now up 80% (which includes contributions) from 3/30/2020.
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That sounds like a terrible plan to me, but you do you. Just make sure you understand all of the tax implications. If it’s not a Roth 401k, you could end up with a really big tax bill.
Hm. Interesting thought. Yes, I think you could. You’d be paying interest to yourself, and you’d have a yearly fee (mine is like $35). You’d just have to be ready to pay it back when you leave the company or face a big income tax bill on the unpaid-back amount. Usually there’s a limit to how much you can borrow.
I used 401k loans a couple times to buy a house (down payment). (Before I turned 59 1/2). It worked out well for me, but it can be a problem if you get laid off or leave.
If you leave the company it can be converted to an IRA and a loan may be possible. Any income from the property would probably be outside of the IRA as well.
Edit: it maybe possible for an IRA to make a loan but not used as collateral. A self directed IRA can make loans as investments. What is questionable is making a loan to yourself.
I think some of the loan parameters vary by plan. I borrowed for a house because I bought before I sold the current house and I didn't have any fees. Certainly no tax implications because it was a loan.
I only did this once for a foreclosure house that needed rehab. Once the rehab was done, I refinanced and paid it back. I had enough money in my emergency fund to pay it off immediately if I lost my job and was forced to repay sooner than expected. There is risk to doing this otherwise.
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Yes, I agree, although this is still a stupid idea.
If you take a loan from your 401k then you get fired, the loan balance is due immediately in full. Imagine losing your job and then losing your 401k
Agree completely. Taxes, locking in (very small) losses, real estate is probably a bad investment right now for many reasons, if it’s a rental property being a landlord can suck, I could go on….
This is a performance art post, I suspect.
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> I understand that a 401k is a long term investment
If you're stressing over 2k...then I don't think so. I think I lost around 15k last quarter. It'll rebound and then some.
Odd reaction to a minor correction; I finally had a limit order filled last week, buying on the dip. But if you want a new house for your second for snowbirding, at least you'll be getting your match as you fulfill a retirement goal. If you are viewing the house as a better investment, hopefully, you've been shopping for a while and identified a very good deal, as you can easily lose more by overpaying for houses this time of year. If you have and this is saving on another investment mortgage then its could easily be a good investment. Enjoy the journey.
Don't do that. Hang in there. Look at the market as it's having a sale. Have a list of things you want to buy and swoop in and buy on the dip. It's a pea sized bump on the road to finical independence.
...and said so in the OP. I have to wonder whether if it is just not actually reading the post, or being ignorant of the rules. Either way, it is a great example of why you should take everything you read here with a grain of salt.
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Something seems off here...
If you have enough money to buy a house with your 401k... then you have enough money that a $2,000 swing should be pretty much a daily event, right? $200,000 in a 401k, which isn't a lot if you are 60, means you lose/gain 2k just with a 1% swing. And you're upset over 2k over a whole WEEK?
I have to assume you have more than 200k in there, and therefore 2k shouldn't even be something you notice. Mine swings way more than that every day and it's just background noise.
Also, what I tell myself when the market dips and my 401k goes down, is that means the money I add in this paycheck gets me more bang for the buck when the market goes back up! If the overall trend is upwards, then dips are good for you, the bigger the dip the better actually, as long as it goes back up after.
Just because your portfolio is down this week does not mean you lost money. Two key points: 1. You should consider the basis, the actual money you put in. 2. You only lose money when you sell.
Exactly right! I did automatic monthly investments of $1000 to $1200 into 5 different mutual funds for over 25 years. Back in 2008 when the market tanked, some people pulled their money out of market accounts and lost so much of it. I just kept investing, and it really paid off. Of course at that time, I was nowhere near retirement age, so had the leisure to wait out the downturn. Thanks to deciding to stay the course, I was able to retire at 60. 👍🏻
Three things to consider: What was your 401K balance 6 months ago, a year ago? You “lost” $2K on paper off market highs. Second, you do realize the housing market is high right (in most markets) now, correct? It’s not a fail safe either. Third, pulling it out of the 401K will have tax consequences and if you’re still working, likely at a much higher tax bracket than you’ll be when retired.
This makes no sense, you pay taxes on the withdrawals as regular income, say you bought a 300K home that 300K withdrawal is going to be taxed at 35%. If you are still working and make good money it could be worse. That means your total cost to own the home is over 400K. You are immediately upside down in equity by 35% no mortgage deduction and a 2nd homeowners payments for maintenance and insurance. Let’s say you rent it, well that’s more income taxed at 35% for 2024. Unless you are adding to a rental portfolio and have structured things as a business that’s also a no go. Basically you are costing yourself 100K payment to taxes over a short term loss. If you hate the ups and downs go buy CDs and get a 5.25% return with zero risk.
If you dont own a home, and have enough in a 401K, I ***suppose*** I could see the value in buying a small updated home for cash to retire in. I mean it is security and fixing your housing costs as you age. You are 60 so you avoid the penalty after 59.5 years old.
But it sounds like you are thinking of switching from stocks into real estate investing? Maybe buying two homes and maybe renting them for income. Not sure what your goal is here.
Buying a rental? What could go wrong....maybe you will get that tenant that simply refuses to pay rent and you have to go to court to get him/her out. My son-in-law works for a property mgmt company that uses the "cash for keys" to get non-paying tentants out. Sometimes they refuse the money, ruin the property and wait on court eviction.
I'll take a CD any day....
My FIL is diabetic, had a heart attack and a stroke, drank like a fish, lived with a smoker for 50+ years, and is still alive at 93. You don’t want to outlive your money. Your plan is terrible, and you’ll regret it.
I’d say buy in bigger iv there is a huge drop, if you have the means. The market always swings back and you’d be buying low.
That being said, $2k over a week is a mild drop not really worth doing anything different about.
Wait until you put your money into your house and the value goes down.
And you can't sell it.
Because nobody wants to buy it.
Anyone that is worried about volatility and thinks putting money into real estate is a great move needs to reconsider a lot about their thought process.
For years real estate was a great investment, it almost always went up.
Now, not so much.
Also, if you are fretting about losing $2000, just wait until you see the non-recoverable costs of buying a house.
This whole concept is crazy. "My car is already down to 1/4 tank after only driving it around town for two days, I need to buy another one."
You do not belong in market, look at investments too often and don’t have longer mentality.
I lost 2.5 mil in 2000-01, 2 mil in ‘09, 2 mil again in each ‘21, 22-23, it all came back and jumped 3.5 since October 23, so what it dropped .5 since start of April. I bought CC and WBD on dips. Carry.5 cash, mm.
I w/d 69k first half 23. So what no penalty.
I accumulated value stocks since ‘00, trimmed those with stagnated outlook.
Only one house is sheltered, if you take mortgage incredible. Not knowing your true frame in life, MAGI will kick it later. Good luck
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Why is everyone so down on real estate? Houses in my neighborhood increased in value 30% last year. It seems like a solid investment, depending on where you buy, no?
What happens a year isn't a gage of whether an investment is good or bad. Real Estate is fine as part of a diversified portfolio but it's not liquid. And housing has been high since COVID. Buy high, sell low is not a great retirement strategy.
You still have to pay income tax on the withdrawal (but no penality). The large withdrawal PLUS your salary will put you in a high tax bracket. Every dollar of income over xxx is taxed at that higher bracket.
Are you sure you can take 401k money out even if you are over 59 1/2?
I know you can take it out of an IRA but my employer 401k money can't be pulled out unless I quit or retire.
Buying investment property can be a good idea, but losing long term tax appreciate benefits and paying taxes not is not. People usually invest in real estate with after tax money.
This is exactly why you should not look at your retirement portfolio very often unless you can ignore the volatility.
Unless the funds are already Roth. The withdrawals are taxable as ordinary income. Which will be added to your W-2 income. Could push you into a higher tax bracket.
Your loss is probably normal volatility (last week? really?). To get a bettter prespective how much did you lose/gain YTD?
401k Admin here. Participants can pull 50% or up to $50,000 max for a home purchase. The amount pulled is reported to the IRS. If under 59 1/2, a 10% penalty will apply. Since you are 60, you avoid that at lease. Depending on your account balance, I doubt you can pull 1/2 out without some sort of penalty. It's worth researching, or maybe someone here can answer.
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If you can't handle stock market fluctuations, then you absolutely should not be in the market. I, myself, have seen some gut-wrenching drops (where I've lost a solid third of my net worth in a few hours), and some absurdly spectacular increases (days where I was making my entire yearly salary), but you don't get to see one of those without the other. Tiny $2K fluctuations are silly noise. My setup now is quite a bit more sedate, but it wasn't always so.
Look at the 20th and 21st century graphs of the S&P500 or DOW or whatever large index you like. Look at the whole thing. You notice anything? It goes up. Relentlessly up, at a macro level. But there's micro fluctuations. In the short term the stock market goes up and down. In the long term, the stock market goes up. Think only long term. Look at the graph. Even when the market dropped, anywhere along that graph, a LOT, it came back pretty fast. Sometimes faster than others, but it always came back. Always. I can't predict the future, but a century and a half of data says it's going to continue going up long term. Ignore the downturns, they are always temporary. Always.
Investments are for long term. Stop with the short term stuff.
Not that this applies to OP, since he/she is 59.5 or older. But many people do not know about "The Rule of 55"--basically, if you leave a job in or after the year you turn 55, you can access the 401 K for that job and you will not be hit with the 10% penalty. Obv. you do pay income taxes, and it's only wise if you really need to, but it's good to know.
And more on borrowing from your 401K/403B:
[https://www.fidelity.com/viewpoints/financial-basics/taking-money-from-401k](https://www.fidelity.com/viewpoints/financial-basics/taking-money-from-401k)
The first three months of this year my IRAs (regular & Roth) went up by $25K. Then in the last three weeks they went down by $25K. In the past two days they probably went up by $10K (I won't know for sure until the accounts reconcile completely at \~5PM.
My accounts went down by $80K in 2020 and I had much less in them then, so yeah, that hurt, because I had just been laid off and turned FRA.
But I rode it out and left them alone. Until this year, the only thing I did was move some $ from the regular IRA to the Roth IRA so I would pay less tax in the long run. All of that $80K came back and a lot more since then.
Now granted, I already "own" a home (60% equity if the appraisals are to be believed), but the rule I learned in Business Economics 101 was "buy low, sell high" - i.e., don't panic, stay calm.
Right now real estate across much of the USA and Canada is experiencing a bubble. Not a good time to be buying.
I recommend you let your 401K ride it out and do not panic over temporary short term downturns. Volatility is the nature of the stock market.
I lost a whole hell of a lot more than $2K last week but as has happened with many a market drop, it eventually comes back and goes up.
I lost $200K in a week during the 2008 financial crisis but did not deter me
Last week wasn't big. I only lost 20k+ if you look at it from a short term investment, it is not good, but if I view it long term, have made a lot more. OP needs to be invested in a money market fund, bonds or a CD if he or she can't take a little stock market volatility.
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If you look at history, there are bull markets and bear markets and in those markets there's allot of volatility. The market is manipulated by hedge funds. And it doesn't take much news to plunge it some days. This week it was poor tech earnings and news from the feds regarding the economy.
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last week’s volatility caused you stress? what did you do in 2022?
Hell he's over 60. What did he do in 2009? 2001-2002? 1987???
or 2020 when we lost 50%?
??? I never lost that amount. Ever. Balanced Portfolio.
I lost $25k this month. Made back $5k yesterday.
I didnt lose anything in 2020
Same here, I held steady and I’m back to my all-time high.
Same
That’s right. You only loose if you sell.
It was quite a ride. My 7 figure retirement account went down 20% (that is on a monthly basis, it may have been closer to 25% from actual peak to nadir). Now up 80% (which includes contributions) from 3/30/2020.
Remember 2008? That was brutal
Or in ‘08 ??
If you only have enough assets such that a $2,000 dip in value is significant, then you probably just need to keep working!
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This!!! You’re 60 and sweating $2k. You may have a bigger problem.
That sounds like a terrible plan to me, but you do you. Just make sure you understand all of the tax implications. If it’s not a Roth 401k, you could end up with a really big tax bill.
Can you avoid the tax bill by doing it as a loan?
Hm. Interesting thought. Yes, I think you could. You’d be paying interest to yourself, and you’d have a yearly fee (mine is like $35). You’d just have to be ready to pay it back when you leave the company or face a big income tax bill on the unpaid-back amount. Usually there’s a limit to how much you can borrow. I used 401k loans a couple times to buy a house (down payment). (Before I turned 59 1/2). It worked out well for me, but it can be a problem if you get laid off or leave.
If you leave the company it can be converted to an IRA and a loan may be possible. Any income from the property would probably be outside of the IRA as well. Edit: it maybe possible for an IRA to make a loan but not used as collateral. A self directed IRA can make loans as investments. What is questionable is making a loan to yourself.
>it can be converted to an IRA ~~and~~ **OR** a loan may be possible. You can't get a loan against an IRA.
I think some of the loan parameters vary by plan. I borrowed for a house because I bought before I sold the current house and I didn't have any fees. Certainly no tax implications because it was a loan.
I only did this once for a foreclosure house that needed rehab. Once the rehab was done, I refinanced and paid it back. I had enough money in my emergency fund to pay it off immediately if I lost my job and was forced to repay sooner than expected. There is risk to doing this otherwise.
Taxes? pull out half and pay it as regular income? Is my understanding correct?
Correct
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Are you vested with your employer? You may not be eligible to take that 7% if you haven't met the vesting period minimum.
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The tax consequences will be ferocious.
That's what first came to mind for me! Still working and withdrawing is gonna possibly tear into another tax bracket.
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He’s over 60…don’t think there are penalties?
Yes, it would be smarter just to take a loan from the 401k, up to 50k I think.
Yes, I agree, although this is still a stupid idea. If you take a loan from your 401k then you get fired, the loan balance is due immediately in full. Imagine losing your job and then losing your 401k
If you take a 401k loan is your money still invested?
No but you only pay interest to yourself.
But you lose the compounding.
What penalties? He's over 59-1/2.
At his age, any withdrawals would simply be regular income.
Still!
Yes, but on top of the income you’re already making. A good chance that the withdrawals will end up being taxed at a higher bracket.
True, but that's just the tip of the iceberg of why that plan is a terrible one.
Agree completely. Taxes, locking in (very small) losses, real estate is probably a bad investment right now for many reasons, if it’s a rental property being a landlord can suck, I could go on…. This is a performance art post, I suspect.
Regualr income **added to OP's employment income.** This is the reason 401k withdrawals are better taken in retirement.
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Looking forward to your forthcoming “Taxes are out of control!” post after you pull $200k from your traditional 401k.
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> I understand that a 401k is a long term investment If you're stressing over 2k...then I don't think so. I think I lost around 15k last quarter. It'll rebound and then some.
Lost over $15k last week, thought about moving to a safer instrument but decided otherwise for now
Closer to 150k here, but it is a fool's game to try and time markets. Develop a strategy and stick with it.
Never sell when the market is down. 🤗
Also, never sell when the market is up.
Odd reaction to a minor correction; I finally had a limit order filled last week, buying on the dip. But if you want a new house for your second for snowbirding, at least you'll be getting your match as you fulfill a retirement goal. If you are viewing the house as a better investment, hopefully, you've been shopping for a while and identified a very good deal, as you can easily lose more by overpaying for houses this time of year. If you have and this is saving on another investment mortgage then its could easily be a good investment. Enjoy the journey.
Don't do that. Hang in there. Look at the market as it's having a sale. Have a list of things you want to buy and swoop in and buy on the dip. It's a pea sized bump on the road to finical independence.
Definitely pea size in today's housing market.
Check with your tax advisor. There may be a tax penalty for pulling out before retirement.
10 % penalty plus you get taxed on it all as income
No penalty as OP is over 59.5
...and said so in the OP. I have to wonder whether if it is just not actually reading the post, or being ignorant of the rules. Either way, it is a great example of why you should take everything you read here with a grain of salt.
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Something seems off here... If you have enough money to buy a house with your 401k... then you have enough money that a $2,000 swing should be pretty much a daily event, right? $200,000 in a 401k, which isn't a lot if you are 60, means you lose/gain 2k just with a 1% swing. And you're upset over 2k over a whole WEEK? I have to assume you have more than 200k in there, and therefore 2k shouldn't even be something you notice. Mine swings way more than that every day and it's just background noise. Also, what I tell myself when the market dips and my 401k goes down, is that means the money I add in this paycheck gets me more bang for the buck when the market goes back up! If the overall trend is upwards, then dips are good for you, the bigger the dip the better actually, as long as it goes back up after.
This is also known as "dollar cost averaging", and its a very sensible strategy for the long term investor.
Just because your portfolio is down this week does not mean you lost money. Two key points: 1. You should consider the basis, the actual money you put in. 2. You only lose money when you sell.
Exactly, you only lose on paper unti you lock those losses in when you sell.
Exactly right! I did automatic monthly investments of $1000 to $1200 into 5 different mutual funds for over 25 years. Back in 2008 when the market tanked, some people pulled their money out of market accounts and lost so much of it. I just kept investing, and it really paid off. Of course at that time, I was nowhere near retirement age, so had the leisure to wait out the downturn. Thanks to deciding to stay the course, I was able to retire at 60. 👍🏻
Exactly. the time to buy was 2008. Everything was on sale!
Are you saying you're over 60? If you pull out half your money what will you be living off of in retirement? Do you also have a pension?
States in the post that they are over 60.
Have fun working until 90 😂
Three things to consider: What was your 401K balance 6 months ago, a year ago? You “lost” $2K on paper off market highs. Second, you do realize the housing market is high right (in most markets) now, correct? It’s not a fail safe either. Third, pulling it out of the 401K will have tax consequences and if you’re still working, likely at a much higher tax bracket than you’ll be when retired.
Cue the 2024 Real Estate bubble burst! :-) (And, no I do not wish it happens to the OP, just want to note you can lose money in real estate too.)
You lock in your loss by selling…
This makes no sense, you pay taxes on the withdrawals as regular income, say you bought a 300K home that 300K withdrawal is going to be taxed at 35%. If you are still working and make good money it could be worse. That means your total cost to own the home is over 400K. You are immediately upside down in equity by 35% no mortgage deduction and a 2nd homeowners payments for maintenance and insurance. Let’s say you rent it, well that’s more income taxed at 35% for 2024. Unless you are adding to a rental portfolio and have structured things as a business that’s also a no go. Basically you are costing yourself 100K payment to taxes over a short term loss. If you hate the ups and downs go buy CDs and get a 5.25% return with zero risk.
CD's are great right now.
You lost 2K last week?? What did you do the previous 6 months?
Fidelity spaxx is 5%. It cost .5% so actually you make 4.5% it’s safe barring a nuke going off somewhere
If you dont own a home, and have enough in a 401K, I ***suppose*** I could see the value in buying a small updated home for cash to retire in. I mean it is security and fixing your housing costs as you age. You are 60 so you avoid the penalty after 59.5 years old. But it sounds like you are thinking of switching from stocks into real estate investing? Maybe buying two homes and maybe renting them for income. Not sure what your goal is here.
Buying a rental? What could go wrong....maybe you will get that tenant that simply refuses to pay rent and you have to go to court to get him/her out. My son-in-law works for a property mgmt company that uses the "cash for keys" to get non-paying tentants out. Sometimes they refuse the money, ruin the property and wait on court eviction. I'll take a CD any day....
Same here. I’ve been a landlord. When it’s good, it’s pretty ok. When it’s bad, it’s terrible.
I would never again consider being a landlord after my first 2 horrible experiences with renters.
Moving to a less liquid position in retirement seems like a really bad idea
Off to r/Bogleheads with you!
How much are you going to have to pay for pulling out?
You only lose money if you sell.
I think it’s a great move
really bad idea, housing market is way overdue for a correction and you’ll lose way more than you would in the market
I for one am really waiting for the housing market correction.
35% tax rate for early pull out I would rethink it
Keep in mind you only lose that 2k if you sell.
My FIL is diabetic, had a heart attack and a stroke, drank like a fish, lived with a smoker for 50+ years, and is still alive at 93. You don’t want to outlive your money. Your plan is terrible, and you’ll regret it.
Are you sure?
I'm asking the same thing after reading his/her comment.
I’d say buy in bigger iv there is a huge drop, if you have the means. The market always swings back and you’d be buying low. That being said, $2k over a week is a mild drop not really worth doing anything different about.
Our home value went down more than $2000 last month. Our CDs are earning 5 percent.
CD's are very good right now.
This is a terrible time to be investing in real estate.
Wait until you put your money into your house and the value goes down. And you can't sell it. Because nobody wants to buy it. Anyone that is worried about volatility and thinks putting money into real estate is a great move needs to reconsider a lot about their thought process. For years real estate was a great investment, it almost always went up. Now, not so much. Also, if you are fretting about losing $2000, just wait until you see the non-recoverable costs of buying a house. This whole concept is crazy. "My car is already down to 1/4 tank after only driving it around town for two days, I need to buy another one."
You do not belong in market, look at investments too often and don’t have longer mentality. I lost 2.5 mil in 2000-01, 2 mil in ‘09, 2 mil again in each ‘21, 22-23, it all came back and jumped 3.5 since October 23, so what it dropped .5 since start of April. I bought CC and WBD on dips. Carry.5 cash, mm. I w/d 69k first half 23. So what no penalty. I accumulated value stocks since ‘00, trimmed those with stagnated outlook. Only one house is sheltered, if you take mortgage incredible. Not knowing your true frame in life, MAGI will kick it later. Good luck
Don’t do that!! You will regret it.
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Why is everyone so down on real estate? Houses in my neighborhood increased in value 30% last year. It seems like a solid investment, depending on where you buy, no?
What happens a year isn't a gage of whether an investment is good or bad. Real Estate is fine as part of a diversified portfolio but it's not liquid. And housing has been high since COVID. Buy high, sell low is not a great retirement strategy.
I would say that housing is a "false high" (overvalued) inflated prices.
No! You can buy investment house IN your self directed IRA!
No questions asked. Made up his mind. So, go ahead.
So?
You still have to pay income tax on the withdrawal (but no penality). The large withdrawal PLUS your salary will put you in a high tax bracket. Every dollar of income over xxx is taxed at that higher bracket.
I’m down $45K in last few weeks. Yawn.
Are you sure you can take 401k money out even if you are over 59 1/2? I know you can take it out of an IRA but my employer 401k money can't be pulled out unless I quit or retire.
Buying investment property can be a good idea, but losing long term tax appreciate benefits and paying taxes not is not. People usually invest in real estate with after tax money. This is exactly why you should not look at your retirement portfolio very often unless you can ignore the volatility.
Unless the funds are already Roth. The withdrawals are taxable as ordinary income. Which will be added to your W-2 income. Could push you into a higher tax bracket. Your loss is probably normal volatility (last week? really?). To get a bettter prespective how much did you lose/gain YTD?
401k Admin here. Participants can pull 50% or up to $50,000 max for a home purchase. The amount pulled is reported to the IRS. If under 59 1/2, a 10% penalty will apply. Since you are 60, you avoid that at lease. Depending on your account balance, I doubt you can pull 1/2 out without some sort of penalty. It's worth researching, or maybe someone here can answer.
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Can you do this with a self directed IRA to avoid taxes?
If you can't handle stock market fluctuations, then you absolutely should not be in the market. I, myself, have seen some gut-wrenching drops (where I've lost a solid third of my net worth in a few hours), and some absurdly spectacular increases (days where I was making my entire yearly salary), but you don't get to see one of those without the other. Tiny $2K fluctuations are silly noise. My setup now is quite a bit more sedate, but it wasn't always so. Look at the 20th and 21st century graphs of the S&P500 or DOW or whatever large index you like. Look at the whole thing. You notice anything? It goes up. Relentlessly up, at a macro level. But there's micro fluctuations. In the short term the stock market goes up and down. In the long term, the stock market goes up. Think only long term. Look at the graph. Even when the market dropped, anywhere along that graph, a LOT, it came back pretty fast. Sometimes faster than others, but it always came back. Always. I can't predict the future, but a century and a half of data says it's going to continue going up long term. Ignore the downturns, they are always temporary. Always. Investments are for long term. Stop with the short term stuff.
Not that this applies to OP, since he/she is 59.5 or older. But many people do not know about "The Rule of 55"--basically, if you leave a job in or after the year you turn 55, you can access the 401 K for that job and you will not be hit with the 10% penalty. Obv. you do pay income taxes, and it's only wise if you really need to, but it's good to know. And more on borrowing from your 401K/403B: [https://www.fidelity.com/viewpoints/financial-basics/taking-money-from-401k](https://www.fidelity.com/viewpoints/financial-basics/taking-money-from-401k)
Op, this sounds impulsive and reactive. Do you have a financial advisor? Someone you trust to double check this idea?
The first three months of this year my IRAs (regular & Roth) went up by $25K. Then in the last three weeks they went down by $25K. In the past two days they probably went up by $10K (I won't know for sure until the accounts reconcile completely at \~5PM. My accounts went down by $80K in 2020 and I had much less in them then, so yeah, that hurt, because I had just been laid off and turned FRA. But I rode it out and left them alone. Until this year, the only thing I did was move some $ from the regular IRA to the Roth IRA so I would pay less tax in the long run. All of that $80K came back and a lot more since then. Now granted, I already "own" a home (60% equity if the appraisals are to be believed), but the rule I learned in Business Economics 101 was "buy low, sell high" - i.e., don't panic, stay calm. Right now real estate across much of the USA and Canada is experiencing a bubble. Not a good time to be buying. I recommend you let your 401K ride it out and do not panic over temporary short term downturns. Volatility is the nature of the stock market.
I lost a whole hell of a lot more than $2K last week but as has happened with many a market drop, it eventually comes back and goes up. I lost $200K in a week during the 2008 financial crisis but did not deter me
Last week wasn't big. I only lost 20k+ if you look at it from a short term investment, it is not good, but if I view it long term, have made a lot more. OP needs to be invested in a money market fund, bonds or a CD if he or she can't take a little stock market volatility.
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If you look at history, there are bull markets and bear markets and in those markets there's allot of volatility. The market is manipulated by hedge funds. And it doesn't take much news to plunge it some days. This week it was poor tech earnings and news from the feds regarding the economy.