Husband Made Bad Investment Decision

Updated on October 14, 2011
S.J. asks from Wantagh, NY
22 answers

Recently my husband made some bad investing decisions in my 401K and it's pretty much gone. I'm beyond feeling angry -- especially since he knew about it and never discussed with me until I opened the statement the other day. There's no way to ever recoup that kind of money I had in there and earned myself for the past 30 years! What should I do?

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J.W.

answers from St. Louis on

There really isn't anything you can do but I am wondering how he did anything. Only the participant can make changes to their 401k, spouses cannot.

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S.B.

answers from Houston on

Did you authorize him to make these investments? If not then he could be in trouble. If you did give the authority to make the investments then its on both of you. Its hard to answer this post without additional information.

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I.X.

answers from Los Angeles on

S.,
Don't be mad at your husband. Be mad, but not at your husband. Perhaps you are not aware that we are all in the toilet right now with the stock market. I have chosen to let my husband do the investing . If he loses money i can't blame him, I could take charge of my 401K, follow the trends, recommend trades, but I don't. Perhaps he was acting on your behalf as he always had but since the money is gone you are lashing out? But right now poor choices and good choices don't matter. There are a lot of people who worked hard and won't have the money they expect in retirement. Its because our currency is volatile and our market isn't truly "free". Be mad all right. But be mad at the laws, entities, leaders and politicians that have created a volatile currency and markets that can be manipulated by those in the know.

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J.B.

answers from Boston on

S., my company administers 401(k) plans. Please take a deep breath. I will assume that you authorized him to have access to your account and played with your money on-line. If you did, change your security information immediately so that he does not have access. If he called in and spoke to a representative using your ID and PIN, you may have some recourse unless you gave him access to your account in writing. Without express written permission, he should not have been able to have a representative make trades in your account on your behalf.

It's pretty rare that a 401(k) plan has the type of investments in it that would be "pretty much gone" in a matter of months, even with a down market. If your plan included a self-directed brokerage option that allowed your husband to invest in individual stocks then this is possible and it's also possible if your plan includes employer stock and you were heavily invested in that. But if your money was in mutual funds, it may not be as bad as it seems and yes, you may very well be able to recoup that money.

The big thing now is to not panic and DO NOT TRADE. If you haven't placed a trade yet (exchanged into a different fund or funds) then your losses are on paper. You still own as many shares as you did last quarter, they're just worth less. If you actually trade out of your current investments, you are locking in your losses and turning them from paper losses to real losses. I would strongly advise you to speak to a financial adviser about what to do next. Again, DO NOT TRADE until you speak to someone. Depending on the quality of your investments, it may make sense to just hold what you have for now, wait for the market to recover a bit and then when the share prices of your investments increase a bit and your balance increases, you can gradually move into a portfolio that you are more comfortable with.

If you'd like, you can PM me some details (how much you had, what your current balance is and what it's invested in) and while I can't legally give you advice, I can at least let you know if you're in the same boat that everyone is or if your investment truly was a dog and underperformed the market.

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B.C.

answers from Los Angeles on

The market is down. Way down. But it will come back. Unless you bought a broken stock like Netflix or Rimm, it will come back. Even if you did buy a broken stock you can buy something else and make a come back.

Remember the rule of 72. My son works for a company who's stock pays an 8.5% dividend. If you invested in that stock, you will double your money in about 8.5 years. And for most people that would make them whole again. Annaly Capital management pays a 15% dividend. If you have your money in that, you can double your money in about 5 years. At 15% in 10 years you will have 4 times what you started with if you re-invest the dividends.

Don't give up. Keep investing. You can get there. "If you think you can or think you can't, you're probably right."

BTW, I do the investing in our home.

Good luck to you and yours.

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M.W.

answers from San Francisco on

Scream into your pillow!! Arghh!! How is it you didn't know about the changes though...didn't you have to approve and sign for the change?

I am soooo sorry. It hurts that you lost the money and that he didn't tell you about it.

I would take a few breaths...go for a walk...scream again into the pillow and then approach him. He probably feels horrible...and like a failure at making wise financial decisions. Talk to a financial planner...make a new plan together. Make a pact that there will be no more decisions made with out "yeses" from the two of you.

Good luck and best wishes! Let me scream for you!! That is such a blow!!

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M.P.

answers from Portland on

Hmm. Because of the fall in stock prices my retirement investments have lost lots of money. Are you sure your loss was caused by your husband? And....as others have said, you have to approve all changes and so I wouldn't blame him, alone. Sympathize with each other.

Follow Momma W.'s advice as to what to do with the actual investment.

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J.B.

answers from Houston on

There are a lot of unknowns...
How long have you been married?
Did you just meet the guy?
How did he obtain access to 'your' money?
Did you build this 401k up before you were married?
This could be construed as theft, deception, lying and the list goes on. Only you can truly answer this question.

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D.B.

answers from Charlotte on

.

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P.R.

answers from Cleveland on

I also wonder how he made the decisions. If you allowed him to, then it's partly your responsibility. And all of it was lost between last statement and this statement? The market has been down but unless he put it in a single stock, for one, it shouldn't be all lost. And are you sure it's lost versus it may take time but could recover? I can't think of any asset class over the last 6 months that has completely been wiped out permanently. And I didn't think most 401(k's) have money in individual stocks versus mutual funds. Funds shouldn't be wiped out permanently. Then it goes into whether any of this was deliberate on his part or he feels just as badly etc.

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J.L.

answers from Chicago on

How was your husband able to do this.....????!!! OMG! Get some legal advice about the situation. You are taking this better than I would. I think you'd be reading about me in the paper...something like...Wife beats husband to death over investments gone wrong. That is unless you knew and gave him permission to do this. Then you have to bear some of the responsibility. Yikes. I am so sorry

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★.O.

answers from Tampa on

Your husband did this without your approval or knowledge... he should pay you back every single penny.

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K.B.

answers from Tulsa on

YOUR 401K? Did you give power of attorney to him? If not, I would seriously contact the company and explain it. To avoid a lawsuit, they might give you part back.

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S.S.

answers from Chicago on

How was he able to touch your retirement money? without your knowledge? My husband did something similar. I was furious. Hurt and then furious again. He got a settlement for an injury at work. It was almost 3 years after the accident before he got it. It was $54,000. we had talked together and decided to put a lot of it away for if he got hurt again at work. And to use a little bit for a downpayment on a house. we did the house thing. used about $15000 I thought the rest was in the bank. unknown to me he had opened an Etrade account. blew through $20,000. I was and still am livid. For those who say it was his accident and his money. He was off of work for 10 months. while he did get some work comp it was a fight and we were already on shaky ground. we lost our home due to medical bills already piled up from my breast cancer. that with his being off work and bills for his stuff pushed us over the edge. we had agreed not to spend it frivilously. he was devestated about it but no getting it back. it was just awful.

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C.B.

answers from San Francisco on

I'm not sure there is anything you can do, but I would find out how he managed to make changes to your IRA without you knowing about it. I would call the bank or whatever and find out exactly how that happened. It might be that if they made changes that weren't authorized, they might have to reimburse the money to you, but that might mean that they would contact law enforcement and have your husband charged with some sort of crime so they an recoup their money through restitution. It may be a slippery slope, but I would at least call the financial institution and let someone there have it about making changes you didn't authorize! I am so very sorry this happened to you. I am in my early 50's so I'm really thinking a lot about retirement and feeling very lucky that I have a retirement account. I would probably consider divorce if my husband did that to me/us!

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G.T.

answers from Redding on

We just lot a bunch on ours too, same investments we've had for years but the market went whack and dollars went down the shi##er! We've watched it recoup and die several time in the last 4 years. Investing is a gamble, the stock market is a glorified Vegas..... times are crazy right now. Try not to be too hard on him, he probably thought he was doing the right thing, I'm sure he's as sick about it as you are.

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C.C.

answers from Houston on

I would be ticked off beyond belief! Thirty years worth of saving your hard earned money...not mentioning financial security. I'm
just shaking my head right now with dicuss. I tell you....some men!!!!!!!!!!! Sounds like something a man would do...some of them "know soooo much".

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P.M.

answers from Portland on

Oh, dear, what a blow. I'm so sorry. Assuming these are stock investments, keep in mind they may have a chance to recover at least part of their value when the economy improves. But I'd make it very clear that NO future decisions or changes are to be made without your input. Ever.

Between this and your previous post, I can't help but wonder if your husband is on a bipolar roller coaster. He sounds just a bit manic to me. That's not an insult, only that I have a sister who's strongly bipolar, and the sorts of decisions and wishes your husband is exhibiting are rather like hers.

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C.D.

answers from New York on

I know he did nt tell you but in this market everyone lost there shirt including me So now start making those deceisions together

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A.F.

answers from Fargo on

Did you give him access to your 401k? If not, I would call and chew the bank a new one. Also, your husband greatly disrespected you by going behind your back and investing without your input. I am so sorry he did that.
My husband and I have several investments. I am great with money, but my husband is a GENIUS with money, so I let him handle it. The difference is that my husband includes me in every financial detail. I hope your husband has apologized profusely to you.

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B.C.

answers from Tampa on

What else isn't he being honest about? This doesn't sound like a good team player looking for your best interest. Be very careful...

R.A.

answers from Providence on

Yikes. How was he able to do this if it was your account in the first place?? Everything is down nowadays, however I would check with the person who allowed your husband to invest using your account in the first place and ask them why you weren't contacted !

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