Ask Terry Questions Out of debt- ready to invest!

Out of debt- ready to invest!

By Terry Savage on February 03, 2021 | Financial Planning / Retirement

Hello,
For the first time in my life I am totally debt free. I paid off school, my car, and my credit cards. I also have a credit score of 810. I’m saving a lot of money and at the point where it’s just sitting in a free checking account. The bank offers CDs and Money Market Accounts but the interest earring rates are lower than 1%. I would be comfortable putting $10k away and not touching it for a year (or more) but want to make it worth it. Any assistance is appreciated. Thank you for all your advice via WGN Radio.

Terry Says

Congratulations! That is a HUGE accomplishment! You are a rarity! And you should be so proud of yourself.
OK, hard to make recommendations without knowing more about your situation. But if you’re working do you have a retirement plan at work, so you can contribute and let the money grow tax-deferred?
If not, and depending on your age this is a long-term commitment — go to Fidelity.com and open a Roth IRA account. They will guide you through it. And just put $5,000 in their Equity-Income fund. Plan to leave it there until at least age 59-1/2. then keep the balance in the bank MM deposit account, earning nothing these days — but ready for an emergency.
then see if you can save more money to contribute to the IRA in the year ahead.

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