Can I Put Money In My 507 Retirement Account And Also In My Ira

It seems I proceed losing coin in my retirement accounts these days. Is there a safe place I can invest my savings and then that at least information technology won't exist affected by the stock marketplace? --Fifty.Due west

Certain, there are plenty of places you lot can put your retirement nest egg to protect it from a possible setback in the stock market. You could motility it into cash equivalents such equally a money marketplace fund, an FDIC-insured savings account or CDs. Some investors have even been flocking to gold lately as a refuge for uncertain times.

But the question is should you?

Cash equivalents are very secure and stable, just they yield well-nigh goose egg these days. So you're paying for security by accepting very low rates of render that may make information technology difficult for you lot to build an adequate nest egg that can support you in retirement.

And while golden has shown that it can concur up well, or fifty-fifty thrive, when stocks run into trouble, it's non as if gilded is a model of stability that rarely drops in value. On the contrary, gold can be even more volatile than stocks and is given to steep periodic losses, witness the fact that, after soaring to near $1,900 an ounce back in 2011 among concerns well-nigh European debt levels, golden has since declined to just over $one,200 an ounce, a slide of about 35%.

Fact is, while moving your retirement stash to one of the alternatives mentioned to a higher place may exist "safe" in the sense that it can shield you from a market downturn, it leaves you vulnerable to other risks. And so in trying to protect yourself, you may actually be doing the opposite.

So what do I recommend instead?

Calculator: Are you backside on retirement saving?

Basically, I advise you try to achieve a residuum between the security you lot seek from short-term downdrafts in the stock market and the long-term returns you need to achieve goals similar accumulating plenty savings to support you through what tin can be a long retirement. To my mind at least, the most sensible way to do that is past investing your savings in a depression-cost mix of stocks and bonds that's conservative enough to beget reasonable protection from market turmoil just aggressive enough to generate the long-term returns you lot'll need to achieve your fiscal goals.

The advisable mix of stocks and bonds can vary from person to person for any number of reasons, including age, the size of your nest egg, how much you lot have in the fashion of other resources to fall dorsum on and how you react to investment losses. But the best style to start figuring out what blend of stocks and bonds makes sense for you lot is to go a sense of how much run a risk you lot tin can comfortably take on, which you tin can do by completing a risk tolerance-asset allocation questionnaire similar the one Vanguard offers free online. You'll receive a suggested mix of stocks and bonds, as well every bit admission to stats showing how that mix and others more conservative and ambitious have performed in both skillful and bad markets.

While those stats can be helpful, I recommend you lot become a step further and also approximate how the suggested portfolio would have performed in a severe bear market similar the i that began in late 2007 and connected through early on 2009, when stocks lost nigh lx% of their value and bonds gained almost 8%.

Such an practise can give you a better feel for how yous might react should yous have to deal with a similar market meltdown. For example, a blend of 70% stocks and xxx% bonds would have lost roughly 35% from the peak of the last balderdash market to the trough of the carry (bold no rebalancing). If seeing the value of your savings reject by that corporeality would have had you bailing out of stocks in a panic, then yous might desire to rein in your resource allotment to stocks a chip.

Nugget resource allotment: Fix my mix

That said, y'all don't want to lean so far toward security that you end upwardly with bloodless returns that make information technology harder to achieve your goals. So when you recollect y'all may accept a stocks-bonds mix that'south correct for you, test it once more past plugging information technology into a good retirement income estimator. That should tell yous whether your investing strategy, combined with how much you're saving (or spending, if you're already retired) will keep you lot on track toward a secure retirement.

Once you've arrived at a suitable portfolio, don't mess with it, except to rebalance periodically, do the occasional portfolio check-up and perhaps shift more than toward bonds as you near and enter retirement.

Going through the practice I've described to a higher place won't completely insulate you from stock market place setbacks. But that's non the aim. Rather, the goal is to provide enough protection to allow you lot to ride out the inevitable stock market slumps so participate in the recoveries, which is a more than effective strategy than trying to conceptualize the market's ups and downs.

So by all means go along some of your portfolio in cash equivalents -- enough to encompass at least three months' worth of expenses during your career and anywhere from one to 3 years' worth of spending in retirement. But aside from such an emergency cushion or spending reserve, the rest of your savings should be invested in a style that gives y'all the best shot at getting through periods of market turmoil without sacrificing too much in long-term gains.