So... My sister and brother in law came over to our Sun Valley dump after doing a hot rod show in Walla Walla. Cute little town that has re-invented itself as a "wine" and dine area.
She says to me -- "why do I have 10K in cash in my 401 and what should I do with it - is it good to have some cash available?"
The reason for this post is because --- once again --- it shows me how "detached" people seem to be from these kinds of accounts! It's just wrong, wrong, wrong, to be so ambivalent (uncaring) about this most important source of retirement funds!
So we open her account --- and the cash pile is from dividends that have been piling up --- RATHER THAN --- being re-invested! OMG -- She's missed 10K in buying -- and who knows how many quarters of payments that could have been buying more shares which pay more dividends which buy more shares! Just shoot me! This is MY sister! If anyone should know this stuff it's her!
Okay -- so it took a minute or two to find the correct check box (she uses Fidelity) to have all the dividends re-invested from now on.
NEXT UP was the question --- "isn't it good to have some cash available?"
NO NO NO NO NO NO! This is a retirement account -- not a checking account! There is nothing available to someone that isn't the proper retirement age. PERIOD. So then why have cash sitting around not earning anything - dividends or growth or anything. They pay you NOTHING for cash in a 401 type account. UGH!
Okay --- rant over.....
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