to having to pay the standard tax and the penalty tax, you also lose one of the major benefits of an IRA: The withdrawn money can no longer grow on a tax-deferred, compounding basis. That hurts!
"Finally, and just as important, in the highly unlikely event that your fancy footwork is a good mathematical move, from a commonsense standpoint it's still question-able. You'll be defeating the prime purpose of IRAs: a savings vehicle for your retirement! Trust me, you'll find small consolation as an impoverished retiree in the fact that many years ago by cashing out a portion of your IRA holdings you saved a few hundred dollars that you probably ended up blowing anyway."
"Assuming I decide an IRA should play a role in my retirement planning, how do you suggest I invest it?" Tom forged ahead.
"As with all investments, your decision should take into account potential rewards, your risk tolerance, and the relevant time frame," Roy replied.
I truly hate vague answers like that.
"So, for investors as young as we are, mutual funds selected using the same techniques we learned two months ago would make a great deal of sense," Cathy reasoned. "A properly selected equity mutual fund offers excellent potential rewards and minimal risk over the long term. What could be longer term than our IRAs, for Pete's sake?"
"Hey, watch your language!" Clyde scolded my sister.
"I strongly agree with your comments," Roy said warmly. "Everything you said makes perfect sense, and I congratulate you for emphasizing the terms 'properly selected' and 'long term.' Those considerations remain vital, as they did with your ten percent savings. Despite my strong