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Retirement Saving for retirement - questions about pensions and pension schemes, 401k's, public and private company pensions, and other saving schemes.

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  #1  
Old 11-20-2008, 01:33 PM
Joel Joel is offline
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Default Simple IRA advice

I have money invested in a simple IRA that lost ~40% over the last few months. Should I convert the balance into cash and buy on the low end to recoup the loss quicker or should I keep everything in their current holdings? Most (95%) of the holdings are in mutual funds and the other investments are in large cap stocks. Trying to get some thoughts on how to proceed.
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  #2  
Old 11-20-2008, 05:43 PM
AYANNA AYANNA is offline
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Default Re: Simple IRA advice

I think you should cash it out and put it in a more stable investment I was going through the same thing and my financial advisor suggested i go into a low-risk high yield investment. After doing alot of research i decided to put my retirement plan into a hedgefund . Doing this i am now getting 16% fixed on my IRA and I get quarterly statements so I can see how my money grows its awesome.
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Old 11-20-2008, 10:10 PM
pants711 pants711 is offline
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Default Re: Simple IRA advice

Quote:
Originally Posted by AYANNA View Post
I think you should cash it out and put it in a more stable investment I was going through the same thing and my financial advisor suggested i go into a low-risk high yield investment. After doing alot of research i decided to put my retirement plan into a hedgefund . Doing this i am now getting 16% fixed on my IRA and I get quarterly statements so I can see how my money grows its awesome.
No offense, Ayanna, but that is not very good advice. I think your financial advisor is just trying to make a quick buck off of you in this market down turn.

Joel, think about this- When you take out money from your IRA, the goverment gets their 10% penalty fee right off the top. Then you will have to pay income tax on the TOTAL that you withdraw next April. Do you really want to give all of your money to Uncle Sam?

Hedge funds are very volatile and you can end up losing everything, very quickly, unless you REALLY know what you are doing. Do you have the stomach for it and the time to invest to do all of the research required, weekly, if not daily? Most average people don't.

Unless you are just about to retire, just leave it where it is and wait it out. The market will rebound. It historically always has. The IRA is supposed to be a long term investment tool, 10-30 years. There will be many ups and downs in it's life time. Just let it appreciate over time, tax free and fund it to the max every year. Funding it now, you are getting the same stocks, bonds, mutual funds, etc. very cheap.

Moving your money around everytime there is a panic will incur fees and penalties and completely negate the point of just letting it appreciate in value.

Last edited by pants711; 11-20-2008 at 10:20 PM.
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  #4  
Old 11-21-2008, 07:26 AM
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GarySpicuzza GarySpicuzza is offline
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Default Re: Simple IRA advice

For the sake of argument and not to be argumentive and in the spirit of combat without being combative:

AYANNA wrote:
Quote:
After doing alot of research i decided to put my retirement plan into a hedgefund.
Really?

Is THAT what your "Financial Advisor" told you?

You have to be an "Accredited Investor" to invest in a hedgefund.

See THIS LINK.

Do the definitions below fit you?
Quote:
a natural person who has individual net worth, or joint net worth with the personís spouse, that exceeds $1 million at the time of the purchase

a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year
If you don't fit the above criteria then your NOT an "Accredited Investor"

Accredited investor is a term defined by various securities laws that delineates investors permitted to invest in certain types of higher risk investments, limited partnerships, hedge funds, and angel investor networks. The term generally includes wealthy individuals and organizations such as a corporation, endowment, or retirement plans.

In the United States, for an individual to be considered an accredited investor, they must have a net worth of at least one million US dollars or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year."

I'm just saying.
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  #5  
Old 12-19-2008, 08:03 PM
MonSavvy MonSavvy is offline
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Default Re: Simple IRA advice

Sir,

I suggest getting a second opinion from another financial advisor.

Some advisors have different philosophies in regards to investments.

If you would like a second opinion I am a partner in a firm who does this professionally. It is unfortunate that you lost so much in the last few months--I'm sure this is heart wrenching. There are ways to invest that allow you to sleep better at night. Looking forward to speaking to you soon.

Sincerely,
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  #6  
Old 01-15-2009, 01:12 AM
ksluis62 ksluis62 is offline
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Default Re: Simple IRA advice

You might also consider a conversion to a Roth IRA, since your losses make the conversion less costly. Motley Fool has an article about this if you're interested:

Roth IRA Taxes | 401(k) Rollover
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Old 01-18-2009, 09:58 AM
brian brian is offline
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Default Re: Simple IRA advice

Quote:
Originally Posted by Joel View Post
I have money invested in a simple IRA that lost ~40% over the last few months. Should I convert the balance into cash and buy on the low end to recoup the loss quicker or should I keep everything in their current holdings? Most (95%) of the holdings are in mutual funds and the other investments are in large cap stocks. Trying to get some thoughts on how to proceed.
Markets work in cycles and you need to accept this if you plan to keep investing - and never never ever cash out in a down turn unless you are absolutely desperate for cash.

After all, any loss in your investments is only a paper loss - it is not a real loss - unless you draw on it.
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  #8  
Old 01-30-2009, 12:43 AM
Will@Morrow&Company Will@Morrow&Company is offline
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Default Re: Simple IRA advice

I think that we have missed a key point of age of the investor. If you are still young like me, 25, then you have more time to recoup your losses. If you are young buy more, like stated before it works in cycles. If you buy more now then it is more potential for a greater return on the money in the future. Stay in the market, don't time the market. Putting your money in cash is the worst idea you have right now.
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