Can I make 4% in my Traditional IRA like I can with savings accounts? (balanced fund, rollover)

[joeman]

I've got a large chunk of savings $ sitting in an online savings account making 4% APY. It's awesome!
But I've got another chunk of savings in my Traditional IRA in a Federal Money Market account that isn't paying nearly as much. I'm 62 years old. What would be my best move with the cash that is in the IRA money market?

[mathjak107]

The answer is that retirement money should be invested and growing .

As far as what’s right for you , no one can say or should say.

We can only say what we would do .

Until I was about 8 years or so from retirement, I was 100% diversified stock funds .

It’s the only way most of us can take the Bits and pieces we manage to save and have it amount to anything meaningful over time

[2Navigate]

Originally Posted by joeman

I've got a large chunk of savings $ sitting in an online savings account making 4% APY. It's awesome!
But I've got another chunk of savings in my Traditional IRA in a Federal Money Market account that isn't paying nearly as much. I'm 62 years old. What would be my best move with the cash that is in the IRA money market?

If it is a rollover IRA in Fidelity, you can buy T bills and get 4.6% or so, depending on maturity date.
BTW, what online savings account pays 4%? I use Barclays, and they are at 3.4%.

[16 Acres]

The only 4% or better now that I'm finding is in CD's only.

[k374]

I have my cash in SPRXX Money market at Fidelity (got the suggestion from the Bogleheads), the 7 day yield on that is 4.14%. The good thing is that with the Fidelity Cash Management account it's treated as cash which is automatically liquidated when you withdraw without any manual requirement to sell first, so I have my Sinking Funds in that as well. It can't be set as a Core position so any deposits you have to manually do the buy.

The T-Bills require some duration even if it's just for 3 months it's still a lock in and with the Fed increasing rates the MM would probably respond much sooner to the new rates.

[joeman]

Bask Bank online is 4%, so is CIT bank online savings.

Of course we don't have a crystal ball, but do you all foresee online savings account rates (and 11 month CD rates) going up to 5% or more in 2023?

[rjm1cc]

You would contact Bask Bank and tell them you would like THEM to move the IRA to their bank and invest it in the savings account.



You do not want the money sent to you as this could result in taxes if it is not done correctly.


This should be very normal for the bank and they may have the forms you have to fill out on their web site.


Since your retirement could last another 30 or 40 years you should take a look at equities (the stock market)

[Lizap]

Originally Posted by mathjak107

The answer is that retirement money should be invested and growing .

As far as what’s right for you , no one can say or should say.

We can only say what we would do .

Until I was about 8 years or so from retirement, I was 100% diversified stock funds .

It’s the only way most of us can take the Bits and pieces we manage to save and have it amount to anything meaningful over time

Agreed. At 62, at a minimum, the $ should be invested in balanced funds like Vanguard Wellesley or Wellington.

[joeman]

Thanks for the advice!

[moguldreamer]

Originally Posted by joeman

I've got a large chunk of savings $ sitting in an online savings account making 4% APY. It's awesome!
But I've got another chunk of savings in my Traditional IRA in a Federal Money Market account that isn't paying nearly as much. I'm 62 years old. What would be my best move with the cash that is in the IRA money market?

Cash or cash equivalents are an asset class. What does your total investment portfolio look like? That is, percentages allocated to each asset class? What does your pie chart look like? What percentage of your total assets are in cash or cash equivalents (e.g., CDs, money market, and the like)

In general, it is better to invest inside your IRA into non-cash asset classes rather than leave it in cash or cash equivalents.