AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner practitioner and have performed fee only investment management and financial planning services for the past 11 years.
Expert: John D Smith, CFP Date: 2/3/2006 Subject: Cash Balance in an IRA.
Question Hello,
I recently made an early distribution from my IRA to take advantage of some of a soaring mining stock and I used the proceeds to pay off my house (yippee!!!) I had Ameritrade withhold the 10% penalty and I also sold enough of the stock to have cash for the taxes I will have to pay next your on the withdrawal. Ameritrade is holding this money as a cash balance in my account.
My question is what should I do with the $25K I have as a cash balance in my Ameritrade IRA account. I want to make sure I can easily access the money in early 2007, but I wouldn't mind getting some return on the cash in the mean time.
Any suggestions? Thank you for your help
Answer Mt suggestion would be to put the money in a competively yielding money market account or a 12 month CD. Internet providers such as Paypal are offering close to 4% on money markets and you should be able to get a 12 month CD paying closer to 4.25% or better right now. If you go to www.bankrate.com you can get competitive yields in your area. I hope this helps.
