Well, I have news for you: You likely don’t have that choice! Most 40l(k) plans specify that you cannot take money out (except as a loan in an emergency) while you are still working for your company! And, if you are thinking of taking a loan, remember that if you lose your job it must be repaid within 90 days or it will be considered a taxable withdrawal!
This is a tough spot for many older workers — and the “match” will be small consolation in a bear market. Remember, these plans are designed mostly for younger workers who are trying to grow their money — not for pre-retirees. but here should be some safer places that offer limited exposure to stocks or long-term bonds.
First, have you checked to make sure there is not a “stable value” fund investment inside the plan? That would be the true safest place. Even bond funds will lose money unless they are short-term, perhaps government bond funds — another good alternative.
If your plan does NOT have this safe place to hide as you approach retirement, it could be sued by employees for not providing appropriate alternatives. There have been some high-profile lawsuits on this issue, so HR departments are sensitive to it. But I’m betting you don’t want to bring this to the HR department for fear of losing your job! Still, it would help others in your situation.
As we are now in the longest bull market ever, it might force you to make a decision between retiring and rolling over your money into an IRA with at least half in a government securities money market fund (at Vanguard or Fidelity) so you can sleep at night — or praying that a bear does not come before you are laid off.