Traditional IRA - What should we do?

Question

Dmitriy Fomichenko · Answer

Amber, there are many investment strategies that you can utilize, which one would be the best fit for you depends on your goals, risk tolerance, age and number of other factors. What is good for me may not be the that good for you and visa versa. Self-directed IRA will allow you to have total control and ability to have true diversification when it comes to investing your retirement dollars.

Mike Warder · Answer

Regarding PSLF, the math once suggested if you owe less than $60k in student loans PSLF was not really worth it. If you owe more than $60k, then you should do it. You and your wife would need to file taxes separately if you do PSLF, otherwise your wife's income will also be included in your monthly payment calculation. I've been making payments in PSLF for almost six years now and once its done it will be a huge relief (for both my wife and me). Money I would have used toward paying off student loans earlier went toward real estate investing and in the long-run those buy and hold investments should pay off well. Good luck!

George Blower · Answer

@Amber Landry

If you want to diversify away form the stock market, then consider investing in tax liens.

James Triano · Answer

@Amber Landry

This depends on many different factors and as @Lance Lvovsky mentions, it also depends on what your entire financial picture looks like. Is this your only retirement account? Or is this just one of many? What are the types of investments this IRA is invested in?

I'm actually thinking this is probably a Tradiitonal IRA that was opened with a bank and is just sitting earning very low interest like a savings account. My wife had one of those and we rolled it over to Vanguard and purchased some low cost index funds. There are many options here but it depends on what your overall picture looks like.

Lance Lvovsky · Answer

It depends on what you are looking to do. I assume the 22k is currently invested in the market. It is not a large sum of money, but generally, there are different strategies you could utilize with a Self Directed IRA. You could purchase real estate with it, invest in alternative assets, you could lend money to others (subject to strict rules and regulations), etc.

With $22k sitting in a Traditional IRA, my first question to you would be what does your financial picture look like? Do you expect an increase in income over the next 10, 20, 30 years? What are your goals? It may be a good idea to sit down with a CPA and have them review your financial/tax situation. For example, if you are in the early stages of your career and expect significant increases in income, it may be beneficial for your to convert the Traditional IRA to a Roth IRA.

Traditional IRA - What should we do?

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