Financial anxiety is everywhere these days, especially for those nearing retirement. If you’re thinking, “We’re in a market bubble“—and considering moving your hard-earned $200K IRA into a safer money-market account—you’re not alone. As the stock market reaches new highs and economic uncertainty looms, the urge to protect your nest egg is understandable. But is this the right move for a 62-year-old single investor?
Understanding the Fear: ‘We’re in a Market Bubble’
History has shown us that market bubbles can form when stock prices climb far above their intrinsic value, fuelled by excessive optimism, easy money, and herd behavior. In 2025, many experts caution that certain sectors appear overvalued, making the “market bubble” concern more than just personal paranoia.
The fear of a sudden correction or crash can be even more pronounced for those approaching retirement age, especially if they are single and lack a financial safety net. The pressure to preserve capital—rather than chase potential market gains—feels intense.
Should You Move Your IRA to a Money-Market Account?
Liquidating stock holdings in your IRA for the relative safety of a money-market account is a defensive move. Money-market accounts offer principal protection and often provide higher yields than traditional savings accounts, which can be appealing if you’re convinced, “We’re in a market bubble.”
However, moving your entire $200K IRA can mean missing out on potential long-term growth and may introduce other risks, like losing purchasing power to inflation.
Advantages of Shifting to a Money-Market Account
- Capital Preservation: Your principal stays protected against market declines, offering peace of mind.
- Liquidity: Money-market funds allow quick access to cash if you need it for emergencies or living expenses.
- Less Volatility: No sleepless nights over daily market swings.
Potential Downsides of Going All-In on Safety
- Lower Returns: Money-market yields rarely outpace inflation or the historical returns of diversified portfolios.
- Longevity Risk: At 62, you may spend 25+ years in retirement. Outlasting your assets due to low growth is a real possibility.
- Missed Recovery: Market declines are often followed by strong recoveries. Being out of equities could mean missing a comeback.
Alternative Strategies to Protect and Grow Your IRA
Instead of an all-or-nothing approach, consider these balanced strategies:
- Rebalance Your Portfolio: Shift some (not all) assets to safer options like bonds or cash equivalents to reduce risk while maintaining growth potential.
- Use a Bucket Strategy: Maintain enough cash for 1-2 years of expenses in money-market funds, while investing the rest for growth and income. This approach lets you manage risk and still benefit from market gains.
- Dividend Stocks & Bonds: Focus on investments known for stability and paying regular income, like blue-chip dividend stocks or high-quality bonds.
- Consider CDs or Treasury Securities: These offer higher safety and potentially better returns than some money-market funds, while still being relatively liquid.
Factors Unique to Single Retirees: What Else Should You Consider?
Being single at 62 introduces unique challenges and opportunities:
- Lack of Dual Income or Spousal Benefits: Your IRA may be your primary resource. Preservation matters, but outliving your assets is just as risky as short-term losses.
- Estate Planning: Make sure your beneficiaries are up to date if you move funds or change account types.
- Health Care Expenses: Plan for rising costs, and consider how your portfolio will support you if your needs change over time.
Consult a Professional Before Making Big Changes
Financial decisions at this stage in life have lasting impacts. Consider a session with a fiduciary advisor who understands the nuances of modern market cycles and retirement planning. An expert can help you find the middle ground between excessive caution and unnecessary risk-taking, drawing on research and resources like those at ThinkInvest for up-to-date strategies.
Conclusion: Balancing Safety and Growth in a Market Bubble
Ultimately, the decision to move your $200K IRA to a money-market account hinges on your risk tolerance, income needs, and outlook for the markets. If you truly believe “We’re in a market bubble” and cannot stomach further volatility, protecting your principal makes sense. However, a diversified, flexible approach will likely serve you better as you navigate the gray zone between retirement and continued growth.
Staying informed, staying balanced, and seeking trusted advice can give you assurance as you transition into retirement—regardless of where the market goes next.
