Simple IRA/Stock market drop
Terry- appreciate your email newsletter. Today, when you talked about moving money to a safer place if “near retirement” what does near mean? I am 55 and hoping to retire at 65. should i be considering an early withdrawal and take a hit on the capital gains ? thanks!
Terry Says
NO! Do NOT move money OUT of your IRA! Simply choose a safer investment for a small portion of your IRA. If the IRA custodian is a brokerage firm or mutual fund company, they surely offer a money market fund. The yields are low, but you won’t lose any money there.
If you withdraw money from a traditional IRA at your age, you pay a penalty AND ordinary income taxes. Don’t do that. Find a safer alternative for some of your money inside your IRA.
Over the LONG RUN — at least 20 years — your stock fund should do well. But the market can stay down for a decade, or more. Not saying that will happen. But you might need some money in retirement before then. So balance things out between stocks and MM funds.
