Money Market Accounts / IRAs: Empty them out or leave them be?

[GreenPartyVoter]

Poll question: Money Market Accounts / IRAs: Empty them out or leave them be?

[Kurt_and_Hunter]

1. To invest them where?

[GreenPartyVoter]

2. That's a good question. Any thoughts?

[napi21]

3. It would be dumb to cash in your IRA. The hit is 10% and there'[s

nowhere you can invest that $$ to recover that penalty.

[arbusto_baboso]

4. Put it this way. If and when it reaches the point where it's worth it to take the penalty...

We'll be so bad a shape that people will be worrying about things far more immediate than any potential retirement.

[RKP5637]

5. Move them to an interest bearing account if possible like in ING, for one. It won't

pay much, but will be something. That said, IMO, the economy is not coming roaring back for most, too much is gamed today by the "big monied Players" in the markets.

[librechik]

6. I was told by a very successful gold dealer that short term cds are the way to go.

That's what he did with his money. And he has a whole store full of gold.

[RKP5637]

9. Yep!!! That's what I think too... You won't make a lot, but you won't lose a lot either. n/t

[Demobrat]

10. I agree with him.

Keep your money in short-term CDs for now, for the FDIC insurance. You won't make any money, but you won't make any money anywhere else either, and at least you'll have that modicum of security. (The insurance on money market funds was allowed to quietly expire).

[CTyankee]

20. Being retired from my perspective I am finding security in annuities.

Guaranteed income instead of the casino game. I can't stand the instability of "income funds." And the ones I have have a floor but not a ceiling. I can "step up" if the market picks up.

Had too much of a beating since 2008...but I realize not everyone has my perspective or my fears...

[Sgent]

7. Very dumb

if you want you can invest those assets in bank CD's or US Treasury's (very safe), or even gold. IRA's don't have to be in the stock market.

[Ruby the Liberal]

12. Note of caution - you can't hold generic commodities (gold) in a retirement account.

You can however hold "newly minted US gold coins" (difference between investing in gold and investing in rare coins, ala Glenn Beck) - per the Government. It is a protection.

Always check with a CPA/CFP before taking the plunge. Many in financial advice practices will do a portfolio analysis for free.

[Statistical]

17. Good advice. However generally speaking the concept holds true.

The 401K/IRA is simply a investment vehicle and a tax advantaged one at that.

Inside a 401K/IRA one can have:
* stocks
* corporate bonds
* municipal bonds (no real reason but you could)
* annuity
* gold or other hard assets
* money market account
* treasury bonds
* real estates (via REITS)
* or simply KING CASH (earning negligible interest).

If one thinks the economy is going to tank and "needs" to do something move money into other assets but never ever take money out of the IRA.

[Skink]

8. Move into managed funds or bonds for now within the account..

after the crash buy up stocks.

[Ruby the Liberal]

11. Don't take the 10% penalty on deferred accounts (IRA)

Talk with your financial house (the people managing the account) about more conservative options.

Just don't let them put tax-deferred money into Munis as that defeats the purpose. There are other income options out there.

[GreenPartyVoter]

13. kick

[TexasObserver]

14. The DOW has risen over 60% since hitting the March 2009 floor.

It will likely be above 11,000 at year's end.

[Jack_DeLeon]

15. Well if you want to give the government 10% go ahead and empty them..

otherwise no.

[Statistical]

16. 40% of people should be ashamed of themselves for giving UTTERLY STUPID ADVICE.

Look think of 401K/IRA as a "bucket". The bucket holds money. Where that money is invested the IRS doesn't care. The IRS only cares if you take MONEY OUT or put MONEY INTO the bucket. Take money out and you will pay taxes, take it out early and you pay taxes + penalty. (Roth is little different but penalty remains).

Thus if someone has in their 401K/IRA $50,000 in stocks..... and they won't nothing to do with the market they should simply sell the stocks and put the money in bonds or cash or T-bills. Keep the money "in the bucket" just change the investment.

NEVER TAKE MONEY OUT OF THE BUCKET.
NEVER TAKE MONEY OUT OF THE BUCKET.
NEVER TAKE MONEY OUT OF THE BUCKET.

If you want less risk then invest in a less risky asset class however taking the money out subject you to income tax PLUS 10% penalty. You can change asset allocation inside the 401K/IRA without penalty or taxes.

However taking money out is very expensive. The 10% penalty is only part of it. Anything you take out is treated as income. Thus you highest marginal rate (and if the IRA/401K is big enough likely it pushed you into the next bracket) PLUS 10% extra pain on top of that. That works out to a 25%-38% instant loss (with no chance to every recover a penny of it) for most people in middle class to take the money out of the bucket.

[cbdo2007]

18. Leave them - but if you're a stock trader I'd stay out of the market in Sept-Oct

[raouldukelives]

19. I took mine out years ago

But only because I didn't know what my 401k money was invested in. I sleep better knowing that I'm an anti-war environmentalist that doesn't make money off military contractors, big oil and deforestation.