11 Mar

One more time but with more info: I had $4,000 in a Roth IRA which grew to about $4400 but NOW ?

Posted by admin under enart.hubeidaxue.com

  • it is down to $3600!! I have 10 yrs before I retire. What are the odds that it increases again within 10 yrs? Will it bounce back or should I take it out and put it in my 3.5% interest bearing savings account where I KNOW it will grow..even if for just a little bit. Thanks in advance to all who help and answer.


  • This will sound weird, but - putting in bank account guarantees a loss - if you earn 3% and inflation is 5% and your interest is taxed.... you are guaranteed to lose. Go with stocks . ... long term nothing beats them.


  • Stop!

    First, no one knows what'll happen. But, it's unlikely that 10 years will see a complete reversal.

    Second, $4000 isn't a lot of money, when it comes to talking about retirement. If this is all you have saved, then you do need to protect every penny of it. But, if you're retiring in 10 years, I hope that you have at least $100,000 saved.

    Third, at 3.5% (which is good for a savings account), you're likely to lose over time due to inflation (although there is some talk of deflation, so maybe you'll win). It's better than leaving it in a sinking stock market, but don't fool yourself into thinking that you're making money.

    Fourth, and this is very important, do NOT pull the money out of the IRA. Leave it in the IRA, but put it in something other than stocks. You can, for example, put it into a 5% CD and still have it be within the IRA. Do not confuse "IRA" for "stock market." They are not the same.

    Lastly, let's get back to my question about whether this is all you have. The reason this matters for your decision is because it matters where else you have money. If you already have a big chunk of money in a savings account or a CD, then you can afford to gamble with a mere $4000 in the stock market. In the end, a gain of $4000 (a near impossible move) or the complete loss of the $4000 should not make a substantial difference if you have enough to retire. $4000 is, at best, a few months of living expenses. When you're looking at living for a 2, 3, or more decades, you shouldn't focus on what ends up being 3 months. You should have your focus on how to have enough money to live, as you'd like, for 300 months.







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