Investment question
Hi Terry-
I just saw you on WGN but only caught the last minute or so. I was wondering what I could invest in with money that I took out of my 401K in 2020 during the pandemic. I was furloughed and unsure about the immediate future. I heard you mention I Bonds and was curious if that is something I should look into. I am 55 yo and currently rent.
Thank you!
Terry Says
Did you TAKE the money out? And pay taxes on it? That was certainly a mistake! If you had left the company, you could have rolled it into an IRA Rollover account and put it in a money market fund, avoiding all taxes!
Or did you “borrow” the money out in 2020– If so, you can replace it now without penalty. It’s hard to offer advice not knowing more about the situation.
Assuming you paid taxes on the money, and not knowing much about your financial situation, I’d suggest leaving it mostly in the bank, although you could buy some I-bonds. The rates are high now but will likely drop in thefuture as the Fed gets inflation under control. And these are a minimum 5-year investment.
Read this article on how to buy Ibonds.
