M458 wrote:J-e-L-L-o wrote:I've done this. If you have an account with a major firm (Vanguard, Charles Schwabb, Fidelity...) you can automatically download the information into Turbo Tax at the end of the year. The program will ask you a few qualifying questions and if you pass all of them, it will do the work for you.
You have to be able to do a rollover into a Roth IRA though. The Roth is more forgiving w/ using your money for purposes other than retirement IF you have too.
Check your performance of your mutual fund. If returns are greater than your loan rate, keep it in there. It's not that difficult to beat 8% return. It's all about asset allocation. If you want to start learning how to put away money for retirement all you need are two books: The Boglehead Guide to Investing (keeping with John Bogle's philosophy of low cost index funds. The founder of the lowest cost mutual funds out there, Vanguard) and All About Asset Allocation.
http://www.amazon.com/Bogleheads-Guide- ... +investing
http://www.amazon.com/All-About-Asset-A ... 0071700781
Served me well with picking my IRA options. I say keep the fund and learn how to choose mutual funds for your retirement with it.
Or you can just cash it out. If you need to take out 60k in loans, take out 56.5k instead.
I totally agree that the Boglehead's Guide is incredibly valuable, but "not that difficult to beat an 8% return"...seriously? Maybe you mean in the long-term, but definitely not in the short-term. And when I say long-term, I'm talking 10+ year time periods. If it were easy to beat an 8% return in the short-term, it would follow that you can consistently produce returns above that level each year...and that's simply not true.
If you had invested $10,000 in Vanguard's Total Stock Market fund on January 1, 2000, 10 years later on January 1, 2010 you'd have a whopping $9,732.51. Oops.
If there's any chance you'll need the money within the next 3-5 years, you'll need to invest with a pretty conservative asset allocation. And a pretty conservative asset allocation is most likely not going to beat the 8% loan rates.
Which is why I recommended the 2nd book for asset allocation. You wouldn't have all your money in one fund. I have easily trumped 8% return w/ a mix of domestic and international and a splatter of precious metals. At a young age you wouldn't need a conservative portfolio.
Sure past is not indicative of the future and who knows where the market will be in 3 years.
And if you would have kept that money in the fund in 2010, it would have more than doubled at todays prices in 2013.
https://personal.vanguard.com/us/FundsS ... IntExt=INT
If the OP NEEDED the money then yes, that is a different story. But I was advising to keep the fund to jump start their retirement plan and learn about how different funds work. But it depends on what plan it is in and with what company.