Ask Terry Questions Rollover IRA early withdrawal

Rollover IRA early withdrawal

By Terry Savage on January 27, 2020 | Investments

With some of my stocks showing massive gains (Apple), it’s tempting to make a partial early withdrawal on my Rollover IRA and pay the penalty, because the returns are still great – down to 90% from 100%. Like many, I’m terrified of a crash. I know that limits any future gains with that money, but my wife stays at home with two toddlers and a few extra bucks would help tremendously right now. This account is a rollover from a previous 401k. I am a Firefighter that will receive a retirement pension, and also have another employer sponsored 457 plan. So this account is a bonus- I’m not relying on it to survive in retirement. I’m 45 and and hoping to work another 15-16 years. In such a scenario, might the early withdrawal make some sense? Thank you!

Terry Says

NO, NO, NO! WHERE is your IRA rollover account? Surely they have a money market mutual fund option! If not, roll your rollover AGAIN to a place like Vanguard or Fidelity where you will definitely have the option of a safe haven like a money market mutual fund. (You can only do one rollover a year, however.) Don’t take the money OUT of your IRA — but do, if you’re uncomfortable, sell part of your stock exposure and move the money into a money market mutual fund INSIDE THE IRA! Do not pay taxes and a penalty by taking the money OUT of the IRA!



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