IRA Question?

Can I sell it and close it - the stock market is getting killed and so is my money

I don't have alot in there- and would rather use it to pay off a CC bill

I already paid taxes on it- it's doesn't come out of my check- I put the money in there myself after I get paid

has anyone ever done this?

Re: IRA Question?

I cashed in an IRA when getting my house. I don't see why you can't but you will have to pay 25% taxes on it for federal. I paid state taxes on mine as well which was 6 something %. You will also be responsible for a 10% pentaly because you are taking it out for something other than a home at your age.

Wait do you have a regular IRA or a Roth IRA?

Message edited 8/16/2007 3:18:43 PM.

Re: IRA Question?

I'm assuming it's a Roth IRA since you paid taxes already?

However, I thought that you can only withdraw your contributions at any time but if you're a first time homebuyer you can withdraw a specific amount. I don't think you can just close out/sell shares from an IRA. *Specifically talking about a Roth.

Side note, even if it's a small amount of money now (with the market doing so poorly) would not be the right time to sell, IMO.

Hopefully, some finance people can chime in.

Message edited 8/16/2007 3:28:34 PM.

Re: IRA Question?

not a Roth- just a regular citibank IRA

Re: IRA Question?

I would leave it...the market will turn around eventually and I agree that selling low is a mistake. You are probably losing more by taking it out and paying your credit cards with it.

Re: IRA Question?

Re: IRA Question?

It is a good idea to just leave it. At retirement it could be a lot. I on;y pulled from one of my IRA's because I was buying a house and needed some extra funds.

Re: IRA Question?

Actually, even though you used after tax money to start the IRA, you got a credit the year you put that money into the IRA when you filled out your tax return (if it is a traditional IRA). So, you would in fact suffer tax penalties if you withdrew the money this year to pay off your CC.

However, there is nothing stopping you from liquidating the investments in the account and letting it sit in cash for while if you aren't happy with the performance of your current investments.

Re: IRA Question?

Traditional IRA's are Qualified plans (ie: pre tax) Any contributions you made to the plan were reported to the IRS and claimed on your tax return. -
If you close the account, you will pay the normal income tax, plus a 10% penalty for early distribution (prior to age 59 and 1/2)
You CAN close the account, you'll just be hit with the taxes on the money -

Re: IRA Question?

You know, this happened to my mom a few years ago...she was losing money every month (the market was horrendous) and eventually closed her account...according to her, this was the best thing she did.