Ask Terry Questions Moving retirement funds to safe haven

Moving retirement funds to safe haven

By Terry Savage on November 22, 2017 | Investments

Hi, Terry. I have a Roth IRA with Vanguard worth around 19k, a rollover IRA with TR Price - $89k. I'm 68, retired with a CPS pension and I want to safeguard my funds and am thinking of moving some or all to possible CDs. Can I do that and keep them in an IRA? I didn't see a CD option with Price and I'm not sure if the CDs with Vanguard are FDIC insured. The "safer" funds at both seem to be mostly bonds and stocks. I know from reading your columns that when interest rates rise, bonds will fall so I don't see the safety of those. I want the majority of my savings to be safe at this point. But I don't want to move them into a bank CD and have to pay taxes because I withdrew from an IRA (the rollover). Can I rollover a portion into CDs without a tax hit?

Terry Says

The "safe" alternative in those mutual fund companies is a Treasury-only money market mutual fund.  It is insured up to $500,000 -- so no worry on that score.  But you're only 68 -- and could live another 25 years at a minimum.  A MM fund will only "keep up" with inflation.  Stocks historically "beat" inflation.  So don't move it all to the illusion of safety.   Just move enough to sleep well at night -- maybe half.  The rest will grow over the long run -- at least it always has in the past.  If you have a 20 year horizon, you're likely to come out ahead, according to history.



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