IRA Withdrawals??? : LUSENET : TimeBomb 2000 (Y2000) : One Thread

My husband and I are in our 60s. We have almost all our savings in IRA C.D.s Since he will not retire until mid 2000, any suggestions about cashing in the C.D.s in 1999, and taking a chance that the IRS will be so out of commission that we won't have to worry about all the tax that would be due? If we leave the money in the bank and they go down, we might lose it altogether. What to do, what to do??? Jean Stephens

-- Jean Stephens (, November 02, 1998


As far as pulling the money out, you will have to make that call. But I wouldn't count on not having to pay the taxes.

-- Buddy Y. (DC) (, November 02, 1998.

Consider moving some of the IRA money into gold bullion. You can't hold it personally. It must be held by an authorized third party (usually a bank). The difference is that the bullion physically exists with you listed as the owner. There is a small chance your paper assets will be worthless or in a legal limbo for years. This bullion move is totally legal and does not incur any penalty in taxes. I would consider taking 10 to 15% out in cash before 2000 (and converting that to durable goods). Just be prepared for the tax penalty even if its 10 years later!

-- R. D..Herring (, November 02, 1998.

Jean: I'm not a financial adviser, nor do I play one on the Internet. I do not work for a bank or other financial institution. Please keep that in mind as you read my comments.

I do believe there is some justification for your concern, however, I don't believe that a full or partial collapse of banking, if it occurs at all, will happen in the immediate future. This means you've got more than enough time to stop, sit down, take several deep breaths and think things through. Your CDs are very safe for the time being -- certainly much safer and less volatile than stocks are right now. This gives you the time you need to carefully consider all of your options. There is no need for an immediate decision. Do not be swayed too much by any one opinion you read here on the Internet.

As mentioned above, such a decision must be yours alone -- based on your own unique situation. Also, should you decide such a move is really in your best interest, do so calulating the tax penalty you will incur and plan on paying it. Don't count on the IRS not being there (at least in some form). The IRS has move lives than a cat.

I would urge you to think very long and hard on this - do not make decisions like this while you are feeling afraid. Consider as many different options as possible, and the consequences of each if you 'guess wrong'. For any move, make sure you understand ALL costs, risks and potential consequences involved - taxes, fees, penalties, etc and then ACCEPT them as part of the cost of doing what you both agree is right. If your plan makes sense, it will make sense taking all these things into consideration.

I would urge you to investigate the Y2K status of your financial institution. Are they taking it seriously by acknowleging the work they are doing (they are working on it aren't they?) or are they just making 'feel-good-don't-worry-your-pretty-little-head-about-it' statements?

I would strongly urge you to seek the advise of a professional financial advisor before making any changes in your current position. Everyone's situation is different and you need someone who will take the time to understand yours fully. I'm not talking about a salesperson from the bank or brokerage house whose prime motivation is the commission he/she will earn from some new 'plan' they are trying to sell to you. And yes, you'll have to pay a financial advisor for their advice That's how they earn their living. (If they're not charging you for this advice, that's your first clue that you're speaking to a salesperson, not an advisor.)

Beware of anyone who claims to 'specialize' in Y2K investing advice - though it would be nice if your advisor was at least Y2K-aware and didn't treat it as a 'hoax'. I don't know if this is really possible yet where you are.

In the long run, the money you spend on professional advice may be money very well spent if it prevents you from making a mistake that threatens your financial security.

You may also want to check with AARP to see what resources they could provide - although be aware that, at least at the national level, they don't seem to be very Y2K-aware right now. I'm hoping this changes soon.

Once you feel you know the right thing to do, wait at least 2 more weeks before acting just to make sure that you are both still feeling the same way.

Best wishes,


-- Arnie Rimmer (, November 03, 1998.

Gary North's recently released report, "Surviving All 3 Stages of the Flight to Cash", can be found at

-- Jack (, November 03, 1998.

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