Transcripts

"Riding Out the Storm"-Touching Untouchable Retirement Funds

SUSIE GHARIB: And finally tonight, we're continuing to follow how you're "Riding Out the Storm." A growing theme is what to do with retirement funds. We recently heard from Dorothy in California, who had a question about dipping into her IRA account. She sold her small health business in California after running it for 30 years. She didn't make a lot of profit on the sale, so she stayed on as a part-time employee and landlord. Then the new owner went bankrupt. Dorothy says the company is still viable and she wants to buy it back. Her question: should she use her retirement IRA funds which have lost $26,000 recently? We asked personal finance expert Harriet Johnson Brackey to weigh in.

HARRIET JOHNSON BRACKEY: This is actually two questions. One is, should she try to restart her business and will it ever be profitable? As a business owner she's the only one that knows that answer. The financial question that she's asking is should she break into her retirement because her investments have lost value and the answer is, please don't do it. Your retirement is a pot of money for far in the future. If you make it smaller today, it's going to be smaller when you need it. Try your best to get some other source of financing today and leave that money alone. In addition, if you take it out now, you may face penalties and you'll certainly have to pay taxes on it.

GHARIB: To share your thoughts and ideas or to comment on what others are doing, please visit the "Riding Out the Storm" section of our web site and Jeff, we hope the ideas keep pouring in.