Withdraw early from IRA for disaster preparedness

It sounds like you are in a rural or semi-rural environment. Is that correct? If so, unprepared people fleeing the cities will be your main problem if/when the economy collapses. The first order of business should be to prepare to be able to defend yourself and your property. Some useful books:

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Are you serious? Thumper

How about medicine? It would be tough to get a headache and have no aspirin. Or a bad cold and no anti-histamine. But, come to think of it, if you became seriously ill, you might be better off near a city than in a rural area. As a matter of fact, if the economic collapse turns out to be as bad as you think, you probably would not be safe anywhere, not even with lots of food, seed, and livestock. Personally, I would hold on to 100% my retirement savings and hope for the best.

I am worried more about having a lot of bottled water in case of an earthquake.

Before you make a mistake that will be very difficult to recover from get your wife to take a deep breath and and do a little reading about international economics at the macro level. Specifically, she needs to consider why other countries would stop accepting dollars as payment when doing so will mean that they can no longer sell all of the goods they currently sell to us. What will happen to their economies when they cannot sell those goods?

Second, she should look at what has happened to Argentina over the last

30 years. Argentina is a good example of a country that grossly mismanaged its economy and did default on its debt. While there were certainly consequences they do not remotely resemble what your wife is anticipating.

Before you make a decision that you will almost certainly regret later take a hard look at the whole picture using information from a variety of sources with differing views and carefully differentiate between hard facts and opinions.

I don't mean to minimize the economic challenges facing the U.S. but we are not close to the type of collapse your wife is anticipating and when you evaluate the likelyhood of a collapse happening you need to carefully consider the vested interests of all of the participants.

Ed, forget about food seeds and livestock. Just get a couple of good shotguns and lots of ammo.

Oh c'mon Bill. You are suggesting a logical path. Obviously we are reading about irrational thought processes here.

What bothers me about all of this is that without electricity, I won't be able to make ice cubes for my scotch.

In the original situation proposed, the answer is a no-win.

There are many scenarios, which we we see on a regular basis within the US that can be prepared for. Every snow storm, the milk and bread customers wipe the shelve clean around here. I'd suggest that most natural disasters would have most wishing for a 2 week supply of food/water. 14 days. About $100 worth of canned soup and water. To bet most of your savings on the US-ending disaster you fear is pretty much a losing bet. You can't protect against this.

Do not withdraw from your IRA. You would suffer an immediate penalty. Instead borrow using everything you have as collateral, maybe even credit cards.

When the collapse happens, you won't have to pay the money back. If the collapse doesn't happen, you may be able to sell the stuff on eBay and pay down your debt.

Frank

Not to take it to one of the moderators of this august list, but you use ice cubes in your Scotch????!!!! May you forever rot in single-malt hell. No wonder you don't capitalize the word.

Chip

It makes more sense to stay in the city and stock up on a lot of Scotch rather than feed and livestock.

Ed, I have always been into guns, disaster preparedness, and so on, so do not take this as a comment from some clueless city dweller.

My answer is: this is really stupid. I have to wonder what else is on your spouse's mind. Maybe she wants to run away with the money. Or maybe she is going crazy.

Just For Your Information,

1) food goes bad after a few years. It is worse than currency at holding it's value. I threw away a lot of rice and other food due to pest infestation.

2) A decent amount of food costs very little to buy if you stock up on cheap stuff like rice and fat, no need to withdraw half of an IRA.

3) If you buy livestock, you end up being in farming business, which is a notoriously tough business.

No one knows whether inflation will occur and whether it will be hyperinflation or just garden variety inflation. Warren Buffett, however, thinks that currencies will lose considerable value in coming years. He is usually right and I always listen to him.

What is not clear is what exactly one could buy to protect oneself from inflation. My own answer, at current prices, is real estate first and stocks second, would be a decent inflation hedge.

i

I am old enough to remember back in the last century when it was all the rage for people to dig down deep and build concrete "fallout shelters" in their back yards to prepare for nuclear war. Somehow those doomsday scenarious don't seem to happen. I wonder how many shelters are still left these days. I wonder how many people wish they had used the money for a few shares of Microsoft instead. Personally, I would prefer to be anihilated in the blast rather than hang around in a concrete shelter for a few months with nobody else left on earth until the food and water and Scotch ran out.

Microsoft? Probably quite a few. Berkshire Hathaway? Every last one...

Exactly. A post apocalyptic world is not one where I'd want to live in.

The subject in this thread is "imminent economic collapse", not natural disasters.

The subject in this thread is "imminent economic collapse", not inflation.

The subject in this thread is "imminent economic collapse", not nuclear attack.

Yes. I read that. I was juxtaposing the human behavior the OP fears from economic collapse to the behavior in natural disasters. One would be hard pressed to parse out how that behavior would differ given a complete collapse of the economy or major physical disaster. Since you posted the same one liner 3 or more times you seem to have a strong feeling that aside from the timespan (I stated that even an earthquake or major storm has a finite recovery period) what do you see as the difference you wish to highlight?

And what amount of firepower would a couple employ that would protect their two cows in a long term collapse?