Posted on 02/27/2020 2:25:45 PM PST by fightin kentuckian
Like many Freepers I have a significant IRA account in the stock market. The last couple of weeks have been absolutely brutal and I've watched my IRA shrink by.... A LOT. I'm dying to hit a liberal so damn hard right now. This is frustrating as all get out.
I'm torn, part of me says "ride it out, the market will come back, be cool. It'll turn around in a day or two" and another part of me thinks that this corona scare downturn isn't near bottom.
How are you Freeper, in the stock market, handling this? AND for you Freepers who keep your money in your mattress, thank you but keep your comments to yourself. I'm looking for constructive comments here.
Probably better to ride it out - selling now would leave you with at least a 10% deficit in repurchasing power...it will come back.
When we retired, i wanted to protect against a big drop and transferred our IRAs to a fund that guarantees 4.8% net increase each year and also goes up more if the Market does well...but if the Market crashes, I don’t lose a penny....seems like a decent trade-off these days.
I have been frugal and saving for a long time. But it’s not as much as you’d think. The amount in non-Roth that I need to convert to see that tax savings is about 250k. The immediate tax hit is not insignificant but will also come from retirement savings that are included in the tax savings plan going forward. I was surprised at the difference in tax to Uncle Sam depending on the strategy used and it took the seven figure number to convince me it was worth the upfront hit. This not only increases the odds my retirement will last to my inevitable end, but that I will leave my heirs something as well. The new law changes many things. It’s worth understanding. All this in my case is dependent on my military pension, which kicks in in about two years, and my company pension which will kick in when I ultimately retire. So it’s a different calculation for everyone depending on your situation. My retirement advisor did the the analysis as it would have been beyond me. But being an engineer, I wasn’t an easy sell. He had to convince me, and he did with numbers.
I just got out of the hospital Monday, being in there since Friday afternoon. Have a blood clot in my left leg, DVT...............
I do not have either a regular or military pension to fall back on. Lucky me. :-(
Depending on how you saved over your life, thats not necessarily bad. My challenge (my advisor put it this way, a problem most people would like to have) is that too much of my retirement income stream will still be taxable. So I have been changing my strategy over the last few years, investing entirely in Roth now (post tax dollars) because I cant do anything about my retirement pensions being taxable.
The whole selling point of traditional IRA’s back in the early days was the assumption that ones retirement income would be less than ones working income. Thus drawing from a traditional IRA would be just like having a lower salary in retirement and the tax would not be excessive. A couple of problems with that. First, in my case, I bought back into my home late in life so I still need to support a mortgage in retirement and I have a kid still in pre-med (increased income need). Secondly, I dont want to live poorer in retirement than now when I am working. I want to be able to vacation with my wife, and live comfortably without the concern about bills, be able to splurge occasionally, and not be in this race where the more I earn, the more that I have to dish out in tax. The second wouldnt be so much an issue if my home was paid off. Others here who paid their homes off earlier in life probably have a very different calculus than I do.
Bump for later
Up over 40% since Trump took office, lost 10 in this panic nonsense...
Still better return than I saw since the days of Bush I.
NEVER SELL ON THE DOWNTURN. Panic selling is how you lose a ton of money.
If you have had your IRA for more than a week, relax.
I trade.
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