Ask Terry Questions How to begin investing beyond my retirement accounts

How to begin investing beyond my retirement accounts

By Terry Savage on October 25, 2023 | Financial Planning / Retirement

I have a 401K from my former employer with $17,900 in it however Fidelity says that only $12,500 is actually mine. The reminder, I’m told, is my former employer’s money that will be removed from the account after 10 years.
I have a 403b with my present employer and it has $2,380 in it. My employer matches contributions- I just increased my contribution from 5% to 12% per check.
I have about $30,000 in a savings acct. I don’t know where to put this money. I know I should max out my contribution to the 403b but I can’t do that and still pay bills.
Also, what should I do with the money in the 401K from my former employer? I am 26 years old. I work full time. I live on my own with a roommate. Thank you for any help you can provide. I haven’t done anything with my savings for fear of making a mistake.

Terry Says

Well, you’re doing a great job of savings, so congratulations.
1. Read this article about doing a rollover of your old 40l(k) account. (I have no idea what they mean by money being removed from that account!) Just do the direct rollover to Fidelity and invest in the S&P 500 account and let it grow for the next 40 years! Don’t worry about it even when the market “crashes.” It will come back!

2. Take about $20-25,000 in savings and buy U.S. government Treasury bills, currently yielding about 5.5% — the safest investment of all. Read this column:

You’ll still need some cash in savings for emergencies, but you can buy 6-month T-bills and select automatic renewal at maturity (read the article) and if you change your mind, just go online to your account and cancel the rollover. The money will drop back into your checking account.

3. Keep saving in your current 40l(k) — enough at least to get the full employer match. Put at least half in the S&P 500 stock index fund in the plan, and then choose one or two other funds to diversify.

NEVER get scared and “chicken out.” You’ll come out far ahead in the long run.
PS Never tell your boyfriend or roommate how much money you have. And when you get married, or actually before you get married, go on Amazon and get my earlier book: The New Love Deal: Everything you Must Know before Marrying, Moving In, or Moving On!!

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