Whilst there is a delay in the action – a quick personal story…
The company I work(ed) for changed to a different retirement account custodian. This change also caused us employees to lose our ability to select/trade stocks with our 401 and Roth funds. Now ALL of your savings had to go into one of the custodial savings funds (made up of a basket of crappy stocks/bonds).
I had a nice nest egg that I have been saving for over 30 years in this program just waiting for the ETF and the chance to take my savings to the “next level”. Of course I was anticipating this ETF from the day the Winkle boys first applied. I did put a large portion of my savings into the Grayscale products and that was nice – for a short duration.
My company/custodian forced us to liquidate our brokerage selections and move into the pre-selected death spiral funds. Of course this happened this summer when the dip occurred and I got wrecked with the move.
With the most certain bull run that was coming I really only had two choices.
1. withdraw all the retirement savings and pay the early penalty
2. quit the company – thus allowing the funds to be freed for a short stint while I shop for a new custodian (the IRS gives you 60 days to re-invest into a new qualified instrument).
I quit my job, took the retirement funds and am riding the wave for 60 days. It has already paid for a couple years salary.
Fingers crossed – breath held.
In the infamous words of the ESPN Ocho announcer Pepper Brooks “It's a bold strategy, Cotton. Let's see if it pays off..”
You are correct that it is a risky... strategy.. and another option would have been to take a loan from your 401k or to invest into bitcoin in separate funds.. but sure, maybe your 401k loan limit is quite low and sure maybe you do not have enough separate funds to make any kind of meaningful and significant investment into bitcoin.. so it does seem that you have given a decent amount of assessment of the risks (maybe not enough of an assessment, but you do not seem to be flying blind).. which is about as much as anyone can hope for under such desperate (seemingly highway robbery-like circumstances).
By the way, EatonABooger if you have not already gotten back into BTC with your 401k funds, then where are you with that? You can do self-directed, but that usually would have required setting something up in advance (before quitting your job) and then you can get the 401k funds and then invest them through your self-directed system... otherwise, if you are just riding out the 60-days then it appears that you are going to have to pay the penalty (10%-ish) (and perhaps the taxes) if you do not find a authorized new custodian, no? Might be better to completely take the funds if BTC performs well enough, too... Maybe you got into BTC in the $40ks or $50ks with those retirement (401k) funds?
1. quit job >> check
I appreciate your disclosing some more details, but surely you are going to get some pushback from me in regards to some of the details that you disclosed, and of course, I do not mean anything negatively personal in terms of my pushback, but this is a public thread.. so we gotta be careful in regards to some of the ideas that you threw out there.
For sure, there are individual factors, and maybe even some aspects that you should not (or do not want to) disclose.
There are a lot of considerations in terms of quitting a job, and of course, you are in one of the best places to make such calculations... Of course, frequently the advice regarding quitting a job is usually to have a plan before quitting, but surely some people have way more options than others in terms of their skills and/or whether they are being adequately compensated for their skills.
Oh by the way.. there are so many damned jobs that do not even offer 401k plans.. .an I am surely not saying to stay with a job merely because it has a 401k plan, but having a 401k plan may well be a sign of a job that is better than some other jobs that have no 401k plan.
2. take the 100% cash-out option (except for the 20% that the custodian is required to hold back for taxes - in case I do not roll back into a plan) >> check
Fair enough.. I suppose that the amount withheld would be enough to cover both taxes and penalties.. in the event that you do not put the money in an acceptable plan within the alottted time.
Have you looked into a self-directed plan? I am pretty sure that you have to set up some kind of a LLC or something like that in order to be able to self-direct your money in terms of such a plan, but I am pretty sure that you would not be excluded at all from investing into bitcoin within such a plan.
3. immediately invest into BTC / ETH >> check
Fuck ethereum and any other shitcoins that you might consider to even be worth investing into.. but of course you are free to do what you like. #nohomo.
4. wait out the 60 days and let the market "hopefully" moon >> in process
Holy fucking shit. That is a short-ass investment plan. I always tell people to try to have at least a 4-year timeline, but I understand that we are in a pretty strong location in our 4-year cycle.. but I would not proclaim that there is any kind of high confidence beyond maybe 60% or so (best case scenario) that the market might cooperate with you, so there ends up being up to a 40% chance that the market will not cooperate......whatever, we need to consider these kinds of gambling matters, for sure.. and of course, the final decision remains for each of us to figure out a balance that works for us both financially and psychologically given all of our individual factors..
5. cash out BTC/ETH and put the funds equivalent to those in step 2 back into a qualified retirement plan that allows brokerage options (letting me pick almost anything that is on the exchanges)
Ok... from your description of "brokerage options, then I imagine that is a kind of self-directed portion.. but still you have to pick from something like GBTC or sure a ETF if it is there... .. Again, I will repeat fuck shitcoins to the extent that you believe that it is prudent to allocate any more than 10% to that kind of bullshit (and even 10% may well be too generous).
6. invest the retirement funds back into Greyscale and new ETF products
fair enough.
7. report back to nice folk at W.O. forum with results.
We are not always completely nice, so hopefully you are not expecting to be treated nicely at all times... but surely we can disagree and still discuss... so long as we are not getting into too many details about shitcoins (which is a slippery slope as you likely appreciate that kind of potential issue in this thread).
8. pick out party attire for the 100K hoot nanny
ONLY? 100k? You are a damned bear, no?
Note: yes, there will be taxes on short term gains
For sure, fair to mention that.. there is almost no way that you can get out of reporting that without substantial risk to yourself (at least getting penalties and perhaps attracting other unwanted attention to your tax filings).. .
Note: yes, one could just bail on the plan and leave the funds in BTC / ETH depending on how the market behaves - will have to look at pro/con
Actually, apart from your juxtaposition of ETH within there, let me try to set aside that inflammatory (I understand that you do not intend it as inflammatory) piece of information, and acknowledge that you are making another decently good point here.. If your gamble pays off in a pretty decently BIG way (maybe you have to figure out what that number would be? Does it need to double? I am a bit doubtful that you could achieve doubling in 60 days.. even though it is not completely out of the realm of what could happen), it might be a good idea to completely liberate yourself from the tax deferral benefits of such funds... One of the aspects additional aspects to consider is that if you keep rolling that 401k money into tax deferred eligible funds, you continue to be able to defer any kinds of interim gains that you get from the funds throughout your trading them around, and that ongoing tax deferral could really add up to a lot of money... but sure, you have restrictions in terms of being able to freely spend the funds any time that you want and other ways that you might choose to store or even invest/consume such funds. There are possibly other considerations as well, and I guess that sometimes people might consider short-term and really it can be quite difficult to foresee all the costs/benefits... and surely, you are in a better position to weigh all of your various individual factors.. while still does not necessarily mean that you will end up making the choice that is even better for you, even if you consider the choice that you make to be the best at the time.. but then once you make it, then you just end up having to roll with it.. because you are not going to be able to go back and make up for it, if you end up choosing the less beneficial route (attempting to account for both finances and psychology for sure).
By the way, I believe that it is worth repeating that I am just throwing out some ideas, and surely no need to take my ideas personally or to presume that I am wanting to substitute my judgement for your judgement, because of course, each of us are going to weigh these various kinds of matters differently, so for sure there could end up being various subtle tweaks that each of us would make to the plan (whether timing or amounts) that could make a BIG differences, but in the end, they end up being somewhat subjective and personal considerations in which some guys might feel strongly about certain aspects or ways of taking risks.. .... which reminds me that maybe it bears repeating some of the individual factors that each of us should be considering that would include cashflow, other investments, timeline, view of bitcoin as compared with other investments, risk tolerance and time, skills and abilities to plan, strategize, learn along the way and to tweak the plan from time to time which may include reallocating, trading, or use of financial instruments - while acknowledging that some strategies or use of financial instruments are more advanced than others and it may not be prudent for some people to use some financial instruments or even leverage/margin trading for that matter.
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