Ask Terry Questions Retirement money — need growth but no losses

Retirement money — need growth but no losses

By Terry Savage on May 24, 2019 | Chicken Money

Good morning Terry,. I am 62-year-old female. I have $60,000 to invest but I’m not sure how to go. This is my retirement account although I needed to grow as aggressively as possible. I would need to be able to access money in case of an emergency although have no intention of touching it.. otherwise.

Terry Says

Well, you have conflicting goals here — saving for retirement and need  for access to you money.  I understand your concerns on both counts. And I’m guessing that this money is NOT inside an IRA, where it could grow tax-free, or tax-deferred.  What I don’t know is whether you are still working, or are collecting Social Security and this is all the savings you will ever have.  That makes a lot of  difference in how I respond to your question. So let me make some assumptions and go in each direction!

If you are not still working, bringing in an income and possibly saving more,then you cannot afford to lose one penny of this money.  It is officially “chicken money” and it must be placed in a safe, but low-yielding account such as bank CDs with maturities staggered, but no longer than two years. Or you could buy U.S. government Treasury bills.  Read this article.

On the other hand, if you are still earning money, you can contribute to a Roth IRA.  In 2019, you could put as much as $7,000 into a Roth IRA — where it could grow tax-free — but that’s assuming you earn at least $7,000 in the current year.  You could take a bit more risk with this money — perhaps investing in an equity-income fund at Vanguard or Fidelity.

But at your stage in life, you should always have at least six month expenses set aside in chicken money bank accounts– so you are never forced to sell your stock market investments in a panic.

You won’t get rich with chicken money — but you also won’t get poor!





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