Moving 401K IRA funds to purchase Treasurybills
Ms. Terry,
I read your column a couple of years ago, followed your advice and purchased treasury bills with money that I had in savings. This has worked very well for increasing my net worth. Thank you very much for the tip. I read your column in the Chicago Tribune every Sunday.
My question is, I have a 401k CD maturing very soon and I would like to take the funds and purchase Treasury-bills. I do not want to begin paying taxes on the money, my intent is to invest the funds in treasury bills as a 401K account. I read on the Treasury website that the interest paid can be placed in designated bank account or Certificate of Indebtedness (C of I). The C of I monies can then be used to purchase additional treasury bills, which allows all funds to remain within the treasury account. Any advice you have would be greatly appreciated.
Thank you,
Terry Says
NO! You can’t do that! Treasury does not act as custodian for retirement accounts.
I’m assuming you have an IRA account, not a 40l(k). (Very few 40lk plans offer CDs as an option!)
If you have an IRA, you could roll a portion to Fidelity or Vanguard — a direct rollover, do not take the money — and then purchase T-bills inside your IRA in a brokerage account with them, or a T-bill money market fund.
