Help me figure out where to put some money $$$

[gamegrrl]

I started saving for retirement pretty late in life. I'm 60. My health is crappy. I got married last year, and together we have about $100K in IRAs, regular savings and a MMSA.

$10K of the total is our emergency fund in a standard savings account. I'm terrified to put that someplace where it would be hard to get at in an emergency.

$5K of the total is my private "Mad Money" account. It's an MMSA (Money Market Savings Account. I have a small VA pension check that goes into that account monthly, and that's where I put all of my NFCU Visa cash back money, rebates I take the time to send in for and other little windfall amounts that come our way because of my diligence :-) I only spend from it for things that I TRULY want, but that are uncommon or silly, and that I don't feel WE should pay for.

The rest is all in Traditional IRAs, earning about 2%. It's not a great return, but it's sure better than the standard savings account.

I would like to figure out something I can do with some of my $10K emergency fund so that it will earn some money for me, but still be accessible to me. I add $300 to this account automatically every Thursday. We only dip into it for unexpected expenses that we can't cover with our checking account, and at tax time for the year's IRA contribution.

Suggestions?

[SouthJamaica]

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@gamegrrl wrote:

I started saving for retirement pretty late in life. I'm 60. My health is crappy. I got married last year, and together we have about $100K in IRAs, regular savings and a MMSA.

$10K of the total is our emergency fund in a standard savings account. I'm terrified to put that someplace where it would be hard to get at in an emergency.

$5K of the total is my private "Mad Money" account. It's an MMSA (Money Market Savings Account. I have a small VA pension check that goes into that account monthly, and that's where I put all of my NFCU Visa cash back money, rebates I take the time to send in for and other little windfall amounts that come our way because of my diligence :-) I only spend from it for things that I TRULY want, but that are uncommon or silly, and that I don't feel WE should pay for.

The rest is all in Traditional IRAs, earning about 2%. It's not a great return, but it's sure better than the standard savings account.

I would like to figure out something I can do with some of my $10K emergency fund so that it will earn some money for me, but still be accessible to me. I add $300 to this account automatically every Thursday. We only dip into it for unexpected expenses that we can't cover with our checking account, and at tax time for the year's IRA contribution.

Suggestions?

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You could probably get a little bit more by putting it in a money market fund, but the difference in dollars is so small it isn't really worth talking about.

[Anonymous]

There are many online savings accounts that offer a bit more than 1%.  Goldman Sachs is one of many.  1% of 10k is $100 a year.

There are also some options that involve a little bit of work to set up that give you a higher rate (but may have a maximum amount you can have in them).  I know of one that gives a 5% rate on the first 5k.  That's $250 a year.

Another option is to decide not to worry about interest rates at all, and instead pursue a strategy of opening bank accounts that are offering big promotions (e.g. open a checking account with us and we will give you $300).  That also involves some labor but you can make a lot more than a couple hundred a year.  A reasonable estimate is that you can make about $2000 a year chasing bank bonuses.  You make a lot more than that if you combine that startegy with balance chasing on credit cards.

Your biggest concern should be developing an investment plan for the 90k you have in your IRAs.  That's a small amount of money that is earning a small return and you are 60.  That's the biggest issue to focus on.

[gamegrrl]

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@Anonymous wrote:

Your biggest concern should be developing an investment plan for the 90k you have in your IRAs.  That's a small amount of money that is earning a small return and you are 60.  That's the biggest issue to focus on.

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I have these IRAs at Navy Federal. So I can move them to another plan? Would I roll them over? What about the rollover limit?

[Anonymous]

The first thing I would do if I were you is read a couple good books on retirement planning and investing.  They don't have to be big books, it's something you could do in a couple weeks.  But you and it sounds like your partner (significant other) should both read them so you are on the same page.

Once you have done that, it should be clearer what your options are.  But nothing can really replace a solid grounding in the fundamentals: what is an IRA?  How is a conventional IRA different from a Roth?  How does the place you store your investments (Roth IRA, conventional IRA, 401k, etc.) differ from the actual investments themselves (index funds for stocks and bonds chiefly).  Why are index funds better than trying to pick individual stocks?  How do you make choices about what index funds are best given your age and planned retirement date?  How do you create a PLAN that incorporates how much you have saved now, your projected lifestyle, your age, etc?

[mongstradamus]

When you say savings account do you mean a high yield savings account thats netting you about 1%+. I would think about doing that if you are bit risk averse , I believe you can also open ira savings account but that may not be something for you if you want access to it as soon as possible. 

[Anonymous]

For your non-IRA, I would recommend Consumers Credit Union.   $5 donation to join.  Their rewards checking is 3.09% for $10k (more if you use them for a CC).  The interest rate does have a few qualifications, but those are easily handled.  Their CC is a BCE clone, so if you need a card for grocery spend you can do well in rewards and get even more interest.

For the IRA, pretty much pick any brokerage account and go.  I use E-trade, and they will give you bonuses for rolling over significant balances.  So will pretty much every other brokerage, so...go with personal preference here.

Good Luck!

[wa3more]

i would leave 10k alone. Also at this point, equities, such as stock indexes, may not be good idea. This market is expensive compared to historical norm and OP can not afford another 2008 crash at this point.