Ask Terry Questions Moving IRA

Moving IRA

By Terry Savage on April 17, 2018 | Chicken Money

I am 68 and have move 403 B to Naval Federal Credit Union in 2017. Is it advantageous to move to another FDIC entity prior to 70? I am hoping to be able to secure a higher rate at a FDIC higher than .025. I enjoy reading your insight over the years. Thanks, Tom

Terry Says

OK, so I'm guessing that you rolled your IRA to the credit union to take advantage of the interest rates there -- but now realize that you aren't earning very much interest.  Of course, you aren't risking any loss either!  But with that low rate, you are probably all in a money market deposit account, very liquid but very short term, with low rates. I'm pretty sure that if you search at, you could find a FDIC insured, one year CD for roughly 2 percent.  In fact, if you check with Navy Federal about their own certificate rates.  You might want to put a portion into a 12 month certificate, and another portion into a slightly longer CD.   It's a strategy called laddering -- so that when/if rates rise, you will always have a portion of your money ready to earn higher rates. Of course, at 70-1/2 you will need to start making withdrawals from your IRA, and they will help you structure your maturities so that you always have cash available to do that.  And they can give you an estimate of how much money should be withdrawn.  My suggestion is not to go to maturities longer than two years.



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