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Where to put a CD ladder
Old 01-27-2011, 07:56 PM   #1
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Where to put a CD ladder

Conventional wisdom has income products in tax deferred accounts. I know that vanguard sells CDs, but surely it's not common to have access to CDs in tax deferred accounts.........so do you just bite that tax bullet for sake of convenience and guarantee? and put them in after tax accounts
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Old 01-27-2011, 08:17 PM   #2
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Conventional wisdom has income products in tax deferred accounts. I know that vanguard sells CDs, but surely it's not common to have access to CDs in tax deferred accounts.........so do you just bite that tax bullet for sake of convenience and guarantee? and put them in after tax accounts
I wouldn't hold them in taxable accounts if that meant putting stock in deferred accounts.
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Old 01-27-2011, 10:02 PM   #3
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I wouldn't hold them in taxable accounts if that meant putting stock in deferred accounts.
Approaching ER do people rollover part of their IRA/401k into an IRA with a bank that offers CDs rather than buying the CD with after tax funds?
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Old 01-27-2011, 11:28 PM   #4
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Approaching ER do people rollover part of their IRA/401k into an IRA with a bank that offers CDs rather than buying the CD with after tax funds?
We use taxable accounts for our CDs because they're half of our two-year cash stash. The other half is in a money market.

I know that the conventional wisdom is to put bonds in tax-deferred accounts, but I think many retirees keep all their cash asset allocation in taxable accounts just to avoid the hassle of 72(t) if they need to spend some cash during a recession. The only cash we have in our Roth IRAs is a dividend waiting for a reinvestment opportuity.

Of course after age 59 1/2 then cash could be held in a CD in an IRA... for example with PenFed. Navy Federal Credit Union also has special rates & terms for IRAs, so perhaps other credit unions do likewise.
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Old 01-28-2011, 03:29 PM   #5
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I know that the conventional wisdom is to put bonds in tax-deferred accounts, but I think many retirees keep all their cash asset allocation in taxable accounts just to avoid the hassle of 72(t) if they need to spend some cash during a recession.
Yeah, the hassle factor looms large. While you may save a couple of extra pennies by keeping your short-term, fixed income assets in an IRA, the added complexity of managing your liquidity from restricted accounts hardly seems worth the potential benefit.
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Old 01-28-2011, 08:20 PM   #6
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Yeah, the hassle factor looms large. While you may save a couple of extra pennies by keeping your short-term, fixed income assets in an IRA, the added complexity of managing your liquidity from restricted accounts hardly seems worth the potential benefit.
It really isn't that tricky. Just sell stock in taxable. Re-balance from bonds to stock in deferred. Two simple transactions.
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