Dear Cheapskate: This may be the ultimate in stupid questions, but it’s been plaguing me for a while. Is there any value in converting my existing 401(k) into cash without removing the funds from my 401(k)? Do they even allow that? I hate losing all that lovely money as things dip and swirl. I would continue to contribute at my existing rate, 12 percent, including the company match of 3 percent for the 401(k).—Symantha
Dear Symantha: Employer-sponsored retirement plans, such as 401(k), typically have a cash option within the list of investments available to plan members. Look for a money market fund. If you move your account assets into that fund (which is perfectly allowable), the money is going to just sit there, not earning. It will be shielded from the wild swings in the market but will begin to lose value because you will not earn enough on your account to even keep up with inflation (reportedly 3.18 percent at this writing).
