Why is My IRA Losing Money?

An IRA account balance can take an emotional hit during market fluctuations, since its investments may include stocks, bonds and mutual funds.

Financial professionals frequently advise diversification in IRA and 401(k) accounts as a means to lower investment risks, by spreading investments across asset classes, economic sectors and geographies.


Many individuals may qualify to contribute to traditional or Roth IRAs depending on their income and participation in workplace retirement plans such as 401(k). Individuals can also set aside savings in self-employed retirement accounts known as SEP or SIMPLE IRAs.

Investors with Individual Retirement Accounts (IRAs) do not pay taxes on the growth of their investments – including capital gains and dividends – while inside an IRA account, provided they stay inside until age 59 1/2 has been reached. Should money be withdrawn before this age threshold has been met, a 10% federal tax penalty will apply.

All good things must come to an end, and once you reach 70 1/2, withdrawals must begin being taken from your IRAs. They are considered current income unless certain exemptions apply.


Losing value of your investments can be disconcerting, but don’t panic and sell them just because the market is taking a dip – doing so may cost more in the long run!

As IRAs are meant to grow over many decades, it’s crucial that your investment remains on course and gives it time to recover. Thankfully, economies tend to go in cycles, so future years may prove more fruitful.

If you want to avoid the unpredictable stock market and still generate returns with your IRA, transferring it into an IRA fixed index annuity could be the perfect way to do so. Doing this can protect your account from further market downfall while offering peace of mind if the recent decline continues into your retirement years.

Rebalancing your portfolio

Rebalancing can help manage risk by keeping your asset allocation aligned with your investment goals. For instance, if your portfolio should consist of 60% stocks and 40% bonds but its current balance consists of 80% stocks and 20% bonds instead, rebalancing would involve selling off high-performing securities to purchase underweighted asset classes such as bonds.

Rebalancing allows you to “buy low and sell high,” the ultimate goal of investing. However, there can be risks involved with rebalancing. Transaction fees could incur as you sell assets to achieve this effect and capital gains taxes could arise when selling assets into taxable accounts for rebalancing purposes.

IRAs can be an excellent way to invest, as you have control over how much you contribute while not incurring tax until withdrawing funds. Consulting with your advisor at least annually to make sure that your investment strategy aligns with your goals and risk tolerance is essential to its success.

Borrowing from your account

Individual Retirement Accounts (IRAs) provide tax advantages when used to store stocks, bonds, or other financial assets. While 401(k)s must be employer sponsored to be available to anyone earning income, an IRA can be set up either on your own or through banks and investment firms; there are different kinds of IRAs such as traditional, Roth, Simplified Employee Pension (SEP), Savings Incentive Match Plan for Employers (SIMPLE), as well as Savings Incentive Match Plan for Employees (SIMPLE).

While it may be tempting to withdraw funds from an IRA when times get tough, remember that doing so will trigger income tax on the amount withdrawn as well as possibly incurring penalties if you’re under age 59 1/2. Instead, seek guidance from a trusted financial advisor on conducting either an IRA rollover or indirect transfer which typically is much simpler and cost-effective compared to withdrawal and is generally exempt from IRS penalties if completed within 60 days.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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