IRA, what would you do with it?

@lilybug (21145)
United States
December 4, 2008 11:54am CST
I had a 401K when I was a manager at a fast food joint a few years ago. It did not really have much money in it since I had only had it a short time when I switched jobs. I rolled it over into an IRA, and have not touched it. It is only around $2000 and since it is just earning interest right now it is not growing very much at all. What should I do with it? Should I just keep it as is? Try to start investing some of it? Or should I just cash it in since it is only $2000?
4 responses
@ersmommy1 (12595)
• United States
8 Dec 08
I don't know. Maybe put 500 each into a savings account for each of your kids. That will earn some money for each of them over time. Then spend some money on something for yourself. Like your license for your business. Or a spare beater car? Either sounds good.
1 person likes this
• United States
4 Dec 08
You shouldn't cash it in. You should put it into some fund which will be managed and build value for when you retired. Two thousand dollars now might sound useful, but if you are not otherwise saving for retirement that needs to be seriously considered.
@lilybug (21145)
• United States
4 Dec 08
I figured leaving it in would be the best option, but where it is now it gets less than 1% in interest. I need to do something with it.
• United States
4 Dec 08
Would that be a temporary effect of the market or how it was doing before the recession?
@lilybug (21145)
• United States
5 Dec 08
It is in a money market account. It is not invested in anything, so that it why so little is being made on it. I am only getting interest like a bank account would.
@Teyjattt (126)
• United States
4 Dec 08
I would invest all of it, for two reasons: 1) The economy is slow right now so stocks are DIRT cheap. I've increased the amount I put in to my 401k for this very reason. 2) If you pull it out now, you not only pay taxes on it (if it isn't a Roth IRA) but you also get penalized for withdrawing it before retirement age. Hope this helps.
@lilybug (21145)
• United States
4 Dec 08
It is in a money market account from what it looks like. Drawing very little interest.
@katsmeow1213 (28895)
• United States
8 Dec 08
That's a tough question. As you may know my husband recently requested his 401K money. He and a co-worker were having a discussion about it one day, and he discovered that he'd actually lost 33% of his money in it because of the stock market. So investing right now isn't really a good idea. Although many of his coworkers do have their 401K invested in risky companies, and they have a lot more money in theirs, even though they all started it around the same time. Ideally I'd say invest it, but I think it's just too risky right now. You might want to just leave it alone until the economy straightens out again, if that ever happens. Or you could just take it out and use it. Or put it in some sort of account that will earn more interest.