Should I get out of my 401K?

I didn't check your age, but if you are not yet 59 1/2 the distribution will become ordinary income plus a 10% penalty. Solution make sure you roll it into a qualified plan and that the 1099-R you get shows that it is a roll over.

Consider this! If you are in a highter marginal tax bracket than when you mnade the contribution, and you take a distribution (before 59 1/2 years old) you pay taxes on the distribution at the higher (current tax bracket) plus the ugly 10% penalty.

IThe poor performance of your funds might pale in comparasion to tax and penalty.

Chuck,

If you were looking as to where to place money now, considering our recession status, where would it be? Could Hermia stop adding to her 401k for a while and invest elsewhere?

I am not a financial planner but I believe the question is not between 401K and IRA, but where to direct your 401K investments. In other words, if you are nervous being in stocks heading into a recession, do you want to invest in bonds or in international stocks? And most people's 401Ks are overweighted in their employers' stocks, so diversifying is a good idea at almost any time.

Hermia..

if I could see your bio, I could help with some advice

I think the answer is "NO" do not pull out of your 401k. Your company is required by law to offer several different investment options. If you believe in market timing, then move according to the market dictates. If you believe in "dollar cost averaging" then you should add some from each paycheck. As you can see, there are many people here who are willing to give advise even if they are not qualified. Each person has their own set of expriences. Badfrog has had his, Milt T has had his , I have had mine. Get connected with someone with formal training that can advise you objectively. Look for a well qualified CFP or Life Planner.

Thanks advantage. I was really asking for my son and his new bride. The subject came up and my answer was your answer.