Ask Terry Questions COVID-19 Financial Crisis — IRA withdrawals

COVID-19 Financial Crisis — IRA withdrawals

By Terry Savage on March 01, 2020 | Investments

My wife and I recently retired and are living off our Soc. Sec. and small disbursements from our modest IRA to cover expenses. Our IRA is currently split up as 42% domestic stock, 24% International stock and 26% bonds. Should we move to a lower risk category with our investments and what kind of moves would you recommend?

Terry Says

As I write this, the stock market is down about 12 percent from its highs. I have been waning retirees for months to have some “liquicity” — money market funds — inside their IRA accounts — especially if you are withdrawing regularly for living expenses. Surely we will have some kind of a “bounce” in the market, although I don’t know from what level. (ie it could go lower before the bounce) So when the market is up and everyone is saying “it’s ok now” then move about 20 percent of of your stock investments (both domestic and international) into a money market mutual fund INSIDE your IRA. That way you won’t be forced to sell at a bad time in order to take withdrawals.



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