Where to put that IRA contribution?
I’m 36 and have never done that well at funding my IRA. I have about $8500 in a traditional IRA mutual fund with Pax World (growth fund), and about $3000 in a traditional IRA CD held by Washington Mutual.
This year I’d like to put my full $5000 contribution into something other than those two accounts, but traditional–I need to minimize my tax liability this year after selling my home. I can do a lump sum in April. I’m more concerned with safety than high earnings, considering how the economy and state of the world in general is going right now.
Suggestions? I am completely clueless on all things investing.
Permalink Submitted by Alan Spross on Wed, 2008-03-19 22:45
This forum does not address investing questions, since individual advice requires MUCH more information about an individual’s total assets, life style, risk tolerance etc.
In general, if this is long term retirement money that you will not need until that time, it is probably a good time to fund your first investment since a small lump sum contribution in April will be done at attractive entry prices of 15-20% below levels of 6 months ago. Buy low – sell high (hopefully). You will not get a good CD rate after this many fed rate cuts.
Look at the Pax fund vrs it’s peers rather than simply it’s negative return over the last 6 months. If the fund has not been good for several years, then open a new IRA for the present contribution and then transfer the Pax balance into the new IRA. You should avoid having too many IRA accounts because you will be paying small account fees per account.