A Long Sigh

My poor, poor Roth IRA. I am losing around 2,000 dollars each in Yahoo (YHOO) and a Swiss fund (SWZ). Almost all my other holdings are also losing money. On the bright side, if the aforementioned two investments do well over the next year, along with my S&P U.S. Preferred Stock Index Fund (PFF), my Roth IRA will be somewhat healthy again. Right now, it's on life support. Five years of gains wiped out.

I wish I had more retirement savings to invest. As crazy as it sounds right now, I'd love to buy more stocks in my retirement accounts.

In my non-retirement brokerage account, which is around 90% in money market funds, I picked up some Starbucks (SBUX), Symantec (SYMC), Nvidia (NVDA), 3M (MMM), and ConocoPhillips (COP), and Citigroup (C). I wanted to buy more Cisco (CSCO) but chickened out.

Update on November 21, 2008:

The S&P 500 lost 46.8% from 12/7/07 to 11/21/08 [from December 7, 2007 (1504.66) to November 21, 2008 (800.03)]

In that same time period, my retirement accounts declined in value 27.9%. Although I am beating the averages in my retirement account, I don't feel happy at all.

Retirement Options for the Self-Employed

If you're self-employed, you have access to multiple retirement accounts, including a SEP IRA, a SIMPLE IRA. and, if you run your business just by yourself, an individual 401k. But how much asset protection do you really have with these retirement options? I can't vouch for the accuracy of the information below, because it's from 2005, but the basic information appears to be useful:

http://www.financewin.com/html/Taxes/200511/IRA-Protection-10193.htm

Because I save a lot of money in my retirement accounts, I've always been concerned about what would happen if I somehow received a judgment against me. Perhaps I need not have worried.

On October 17, 2005, the bankruptcy reform law, formally named The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (11 USC 101), went into effect and apparently protects most retirement accounts.

SEC. 224. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.

   (a) In General.--Section 522 of title 11, United States Code, is
amended--
           (1) in subsection (b)--
                   (A) in paragraph (2)--

[[Page 119 STAT. 63]]

                         (i) in subparagraph (A), by striking ``and''
                     at the end;
                         (ii) in subparagraph (B), by striking the
                     period at the end and inserting ``; and'';
                         (iii) by adding at the end the following:
           ``(C) retirement funds to the extent that those funds are in
       a fund or account that is exempt from taxation under section
       401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue
       Code of 1986.''

Basically, it appears the bankruptcy law allows you to protect most retirement accounts against creditors when you declare bankruptcy. For more information, you should contact a CPA or tax attorney.