To be clear, any account you have is simply a way to hold some assets and each is treated a certain way by the tax code whether it’s a retirement account or not (i.e. –IRA, 401k, 403B, Joint tenant account). So when you say IRA, that does not automatically mean it is aggressively invested in stocks. IRA is just a name given by the tax code and actually stands for "Individual retirement arrangement", and like a 401k is treated favorably by the tax code. I often tell clients to think of an IRA as a bubble that holds what assets you choose to have in it, and it keeps it from being taxed until after it leaves that bubble. that's it; it is not an investment in itself. You can have all cash in an IRA if you’d like.
We generally advise clients to own different buckets of assets. Those for the short term , intermediate term and long term. If you have any immediate needs over the next year or two, it is a good idea to have that money in cash so it is not subject to market fluctuation. If you need money in the next 4 or 5 years, they should be a mix of conservative assets such as bonds and higher risk assets like stock, while long term needs should have a higher allocation of stock for growth.
Now, Without knowing any specifics about you, retirement accounts are generally used for long term investing so owning more aggressive stocks in them is a pretty good idea. So if you are in your 50’s or younger, you likely won’t even be drawing on that money for some years, so you have plenty of time to recover any losses you have now, and by moving to cash, you could certainly miss out on a great deal of growth. For more on recession proofing your portfolio check out my recent article here.
One last thing, it is a good idea to have at least 3-6 months of your expenses in cash in a bank account for your emergency needs (not in an IRA or any retirement account since it should be easily accessible without penalty)
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