Q. I just liquidated my money market account and Roth IRA to put cash down for a condo.
Can you suggest some of my best options to park my regular IRA? It’s presently in an account where I’m paying monthly fees and losing money. – Derek C.
A. Where to park cash now is a question I am asked again and again.
As yields continue to climb, one of my favorite places to research cash options is Bankrate.com, which recently published this list of eight great short-term investments.
Personally, I’d pay careful attention to the low-fee money market options, which are among the most liquid.
Do you have a pre-approved mortgage? You might also talk to your lender to see if they will offer you a good short-term savings rate.
By contrast, a certificate of deposit may require you to lock up your money for too long – making it harder to move quickly for a real estate purchase.
That said, I also reached out to a few experts, and they raised some red flags. The biggest one: Using retirement money to buy a home can be a good financial move, but you should never, ever stop saving for retirement.
“While I congratulate you on your recent real estate purchase, that in itself should not change your ongoing need to have your traditional IRA invested appropriately,” says Brian Hartmann, partner at Granite Bridge Wealth Management, part of Osaic.
It sounds like with your real estate purchase, you have given up quite a bit of funds that were once liquid for the purchase of your new condo, Hartmann notes.
“Without a thorough understanding of your current holdings, it is a challenge to say that what you are doing is not appropriate for your current situation,” Hartmann notes.
With your new condo purchase and the responsibilities that come with that (including insurance, maintenance and taxes), take this time to get a solid understanding of your current investment allocation within your retirement savings.
If after that review you are not comfortable with the conservative or aggressive nature of your holdings, get some professional help. Talk with a fiduciary investment professional to rebuild your investments so that they become aligned with your current life circumstances and goals, Hartmann advises.
“Today’s markets are just as worthy as any other time for investment,” Hartmann says. “That is especially true for long-term investors.”
