PDA

View Full Version : Opinions needed



paker
10th April 2008, 19:46
My problem:
I have a certain amount of money in an account that's being handled by Allen & Company. The money is in a mutual fund that is tied up be a 7 year contract that will extract a 6% penalty for early withdraws. On top of that it's set up as an IRA so in the event of early withdraw I pay the government 10%.

My Question:
I'm 58, so I have 1.5 years before I can get any money from this account without penalty. Should I liquidate the account and suffer 16% penalty and buy silver now, or wait until September '09 when I can get all the money?

I'm leaning heavy on getting the money now, especially considering how poorly the account has done in the last 5 years.

offgrid
10th April 2008, 20:07
We went through a similar thing here (canada); but the penalty we paid was for income tax. We will recoup this because we haven't worked for a couple of years and have no other income. I am not sure if this helps in the USA, but we would have pulled ours out anyway, even with a penalty (we were looking at a 15 year hold). If you can afford the 10%, then pull the trigger, only you can do an honest assessment of your condition. Whatever decision you make will be the right one, win or lose, because it was your decision, not anyone else. Is that too fluffy an answer? If so here is another: Barge into the bank and demand your money while screaming, "I'm not a slave!"

JesterJay
10th April 2008, 22:10
Paker,
You know the answer. You are closest to the "problem". And since you are closest, you know the situation the best.
And I trust your judgement. You have educated yourself and are going to make the right decision.
I cashed in BOTH my and my wife's IRA to buy silver this past winter.
Now go do it!
JesterJay



My problem:
I have a certain amount of money in an account that's being handled by Allen & Company. The money is in a mutual fund that is tied up be a 7 year contract that will extract a 6% penalty for early withdraws. On top of that it's set up as an IRA so in the event of early withdraw I pay the government 10%.

My Question:
I'm 58, so I have 1.5 years before I can get any money from this account without penalty. Should I liquidate the account and suffer 16% penalty and buy silver now, or wait until September '09 when I can get all the money?

I'm leaning heavy on getting the money now, especially considering how poorly the account has done in the last 5 years.

paker
10th April 2008, 22:31
Thanks Jesterjay and Offgrid. I pretty much knew it was the best way, just needed the "push".

Renegade
11th April 2008, 02:22
My problem:
I have a certain amount of money in an account that's being handled by Allen & Company. The money is in a mutual fund that is tied up be a 7 year contract that will extract a 6% penalty for early withdraws. On top of that it's set up as an IRA so in the event of early withdraw I pay the government 10%.

My Question:
I'm 58, so I have 1.5 years before I can get any money from this account without penalty. Should I liquidate the account and suffer 16% penalty and buy silver now, or wait until September '09 when I can get all the money?

I'm leaning heavy on getting the money now, especially considering how poorly the account has done in the last 5 years.

DON"T DO IT!!!!!!!!!!!!!, that money is Taxable income on top of the early withdrawal penalties,,,,,,,,you would have to double your Silver investment in that Eighteen month period just to break even. Very hard to do and quite unlikely, even if You are "very knowledgable" about the Silver Market. Be Careful!

If you feel PM's is where you "HAVE" to be invested for some reason for the "short" period of 18 months, then maybe rolling that IRA over into a Precious Metals IRA would be a much more feasible option. You can't play with the pretty shiney thingies in the meantime, but you can buy a hell of alot more in the long run.

Renegade

Kelly
11th April 2008, 10:25
On the otherhand, Renegade, the stock market could crash and Parker could find his IRA account reduced by 60% or worse. In the crash of 1987 and the other dot.com and tech crash that came later, millions and millions of people Parker's age lost just about everything in their IRAs and their 401ks ending any and all hope for a pleasant retirement. Parker is 58 years old. He doesn't have 20 years left of working to recoup his loses if the market tanks.

Only Parker can make this decision. A 16% cut off the top is certainly something to consider, but silver can make that up in a couple of months if we ever get out of this peculiar slump. Only Parker knows what he can afford to risk.

Do the math, Parker. Right this moment, silver is at $17.72 an ounce. 16% of that is $2.83 so silver would have to go up to $20.55 plus the spread and premium you pay in order to break even.

Renegade
11th April 2008, 13:22
On the otherhand, Renegade, the stock market could crash and Parker could find his IRA account reduced by 60% or worse. In the crash of 1987 and the other dot.com and tech crash that came later, millions and millions of people Parker's age lost just about everything in their IRAs and their 401ks ending any and all hope for a pleasant retirement. Parker is 58 years old. He doesn't have 20 years left of working to recoup his loses if the market tanks.

Only Parker can make this decision. A 16% cut off the top is certainly something to consider, but silver can make that up in a couple of months if we ever get out of this peculiar slump. Only Parker knows what he can afford to risk.

Do the math, Parker. Right this moment, silver is at $17.72 an ounce. 16% of that is $2.83 so silver would have to go up to $20.55 plus the spread and premium you pay in order to break even.

The crash in 1987 only reduced the prices per share in the IRA's, and they have done quite well since. 58 is not old, and 18 months is not long to secure all of his IRA investment plus the 6% guaranteed return he stated. Withdrawal guarantees -16% AS WELL AS ANOTHER 25% OR MORE TAXABLE INCOME HIT ON ALL FUNDS WITHDRAWN (WHICH INCLUDES THE 16%). He will immediately have just over half of his retirement savings left to invest.
Only $20 plus POS sounds easy enough, and I hope it does, but it has only reached that level 2 TIMES,,,,,,,,,,,EVER!!!!!!
It's Pakers money, he should do what he feels right about, but he should consider all the ramifications FIRST, then make his decision. He has worked to get what he has, the object is to maintain that amount at the very least.
People who don't get that, will never get it!

Renegade

nuslvrkwen
11th April 2008, 13:58
I see your situation. I'm new and using this forum to learn how to survive to my retirement. So I ask maybe dumb questions. You may not want to answer me, but please answer them to yourself. WHEN do you think silver will be too high for YOU to buy more? I believe this price stagation we've been going through for over a month will come to an end this summer. After our tax rebate/initiative checks. Apply everything going on right now to yourself.

Airlines are closing, liquidity issues are the reason. AA's delayed flights show the problems with airlines safety were larger than anyone thought. I don't know how it could be anything else. Since 2000 every business involved with transportation or shipping, has had to 'tighten its' belt'. The first thing to go:maintanance. Food lines in Egypt, now. I thought they were a rich country. Cash is so cheap, but look how valuable getting hold of cash becomes. How much debt are you carrying now that you could pay off before the end of summer this year? This would give you more cash to buy more silver later in the year. You are still working now. Look at your monthly expenses and consolidate so you can find more cash. 18 months/two years from now. Silver will NOT be selling for less than $20 an ounce spot. So maybe you should keep your investment where it is, and work on getting cash someplace else.

I know I'm NOT talking to advisors. I'm talking to people who've done what I've considered doing even at this stage of the game. I'm so glad the stupid 401K part of my 'savings for my retirement' is what I've allocated to bring in 1/3 of my total retirement, just looking at my overall picture/plan. I never liked stocks & bonds anyway. And it blows me away how many people put the majority of their cash into them for the life time frame of their 401Ks.

I've got 15 years left to invest on my 401K. It's Fidelity at work. It's such a racket and you gotta do it cause it does things other 'vehicles' don't. Like being able to have it going into the 401K pre-tax. I like the lowering of my taxable income part. We can pay for our medical insurance and transporation to work this way also. Watching my 401Ks 'progress', and seeing what choices you get in company 401K plans - I got sick of things and put everything in short term bonds, including an international bond.

At this point, I expect things to be crappy financially for average people for the next 5 years. I think we really are in a depression. So, I'm partying like it's 1926. Think of people back then who could see what was coming. I want to roll this into a regular IRA, don't I? Or just leave it where it is and close it as things crumble?

Since you are in Canada - If you DO cash in your investment check out the coins in Connecticut? Or Vermont - the person who has to liquidate silver now, and help both yourselves out.

paker
11th April 2008, 17:54
It's Pakers money, he should do what he feels right about, but he should consider all the ramifications FIRST, then make his decision. He has worked to get what he has, the object is to maintain that amount at the very least.
People who don't get that, will never get it!

Renegade

I'm still thinking about what I'm going to do. Eighteen months isn't that long to wait, and there very well could be another "slump" in the PM markets, BUT, before I do anything I going to talk to a tax consultant about the ramifications
of an early withdrawal. The account I have is locked at 5 years and can not go lower than the level it's locked at, so I have a bit of insurance against a crash.

JesterJay
11th April 2008, 18:44
Holy Cow! Why didn't you say so?
Now that is another paper guarantee from a bank or similar institution, isn't it?
IF you believe that you are locked in and that gets you to your 18 month waiting period end, then you would be a bit foolish to cash in now. (Unless you think silver will go to $50 in that time...like some do).
BUT....Is that really a LOCKED IN guarantee???
I cashed in because I saw my IRAs falling, stumbling and plummeting.
Now I got silver. You got it?
JesterJay



The account I have is locked at 5 years and can not go lower than the level it's locked at, so I have a bit of insurance against a crash.