Hi,

In 2007, my mother died, leaving a small (approximately $6000) IRA in the form of a bank CD (3.20% interest rate; matures 10/2009) with myself named as beneficiary. Although I am aware that the conventional wisdom is not to immediately cash out the IRA, I am thinking of doing this, taking the tax hit now, and then reinvesting the money into something with a better interest rate. Does this make sense since the amount is small and I cannot make future contributions to it?

Some more information (if relevant): My tax bracket situation is quite unpredictable; could go up or down or stay the same. Also, my wife and I have several other IRAs currently.

Much thanks….