Holding $600K in cash - feeling like an idiot. Options???

[MrLoco]

LOL! I have more than you in cash....about $800k and I don't feel like an idiot.
Especially when it represents just 13% of our net worth.
I see this as an opportunity. If I need to rebalance, I can use cash and not worry about any taxes from rebalancing using other assets.
Plus, due to probable impending changes in the estate tax exemption threshold; we may make huge gifts to the adult children.
We want to make this in cash so they can use the $$$ as they see fit.
Plus, we need a large cash portfolio as we plan to book many month long luxury cruises when the cruise industry starts up again.
And the cruises we want to book ain't cheap.
Some people are always trying to squeeze every last 1/10 of 1% interest out of every investment. After awhile, it just isn't worth the aggravation anymore.

I remember a quote from one of my all time favorite MAfia movies (Gotti) where the actor says "That guy. He's always trying to squeeze the quarter until the Eagle screams."
So.........stop trying to always squeeze the quarter until the eagle screams. Sometimes it ain't worth it.

[Koolau]

90 degrees to the discussion, but I have half an inch of paper I-bonds - purchased at the bank back in the early 00's. Anyone know how to cash them WITHOUT a gummint account? I don't think banks do it anymore but have not asked. A little help

[ivinsfan]

Quote:

Originally Posted by Koolau 90 degrees to the discussion, but I have half an inch of paper I-bonds - purchased at the bank back in the early 00's. Anyone know how to cash them WITHOUT a gummint account? I don't think banks do it anymore but have not asked. A little help

Me too... from 91. I going to be sad for several reason when I cash those puppies in. I'm not bothering to research how to do it till about 2029...I'll have cash them in several different years for tax purposes.

[Koolau]

Quote:

Originally Posted by ivinsfan Me too... from 91. I going to be sad for several reason when I cash those puppies in. I'm not bothering to research how to do it till about 2029...I'll have cash them in several different years for tax purposes.

Correct me if I'm wrong (anyone - and I didn't look this up) I bonds "expire" (don't earn more interest) after 30 years. Maybe check your status so you don't lose anything - I'm just going on 20 year old memory, so YMMV.

[ivinsfan]

Quote:

Originally Posted by Koolau Correct me if I'm wrong (anyone - and I didn't look this up) I bonds "expire" (don't earn more interest) after 30 years. Maybe check your status so you don't lose anything - I'm just going on 20 year old memory, so YMMV.

Fat fingers they are from 2001

[Koolau]

Quote:

Originally Posted by ivinsfan Fat fingers they are from 2001

A VERY good year for I-bonds IIRC. Congrats!

[ivinsfan]

Quote:

Originally Posted by Koolau A VERY good year for I-bonds IIRC. Congrats!

It wasn't a good year for me.. My Mom died and I put my share of her house sale into i bonds..but I will tell her Thank you when I cash them out...

[LarryMelman]

Quote:

Originally Posted by Koolau 90 degrees to the discussion, but I have half an inch of paper I-bonds - purchased at the bank back in the early 00's. Anyone know how to cash them WITHOUT a gummint account? I don't think banks do it anymore but have not asked. A little help

My first I-bonds were on paper from 2001. I transferred them to my Treasury Direct account (mailed them to the Treasury, registered mail and etc.) where they remain today. You can redeem them from the TD account and EFT the proceeds, or they will probably mail a check but I've never done that.

[jr6035]

Have you checked out Ishares Ibonds etf's? You buy them for whatever year they mature. They have Corporate, Treasury, Municipal and "junk" bonds. All short term. I have the Corporate 2022 etf, IBDN.

[disneysteve]

Quote:

Originally Posted by Koolau 90 degrees to the discussion, but I have half an inch of paper I-bonds - purchased at the bank back in the early 00's. Anyone know how to cash them WITHOUT a gummint account? I don't think banks do it anymore but have not asked. A little help

You can cash paper I bonds at your bank.


From treasurydirect.gov:
Paper bonds
You can cash paper I bonds at most local financial institutions. This is the easiest way to cash bonds and the quickest way to get access to your money.

[ShokWaveRider]

Quote:

Originally Posted by NW-Bound I hold a 7-figure sum in cash or cash equivalents right now. I don't feel like an idiot.

Me too.

[gauss]

My 2 thoughts are:

#1) Could you do a 72(t) plan to get you to age 59 1/2 without a 10% early withdrawal penalty? You would have to run the 72(t) plan for a minimum of 5 years, but should be able to access your traditional IRA funds in this manner

#2) You say that your 401(k) does not play well with rule of 55 -- Does this mean that your plan will not allow partial distributions once you separate from service? If this is not the case, perhaps that plans could indeed be made to play well together. There is a common misconception that if the HR department does not know about the rule of 55 or explicitly mention it in the plan documents, then it is not allowed. This is untrue. All that is i needed is the ability to take partial distributions once you have separated from service.

-gauss

[Fleur58]

Here I was feeling like an idiot too because I have 100K at Cap One and I came here looking for ideas. Its a insecurity nest egg. After reading this thread I am going to leave it as is, but I am motivated to check out ibonds.

[Dash man]

Quote:

Originally Posted by ShokWaveRider Me too.

We also have over $1M in cash and equivalents. Want to have a cushion in case the market turns bearish for an extended period. Still have plenty in the stock market to benefit from the growth. In five year we’ll both be taking social security at 70, but we can take it earlier if the bear shows up.

[ut2sua]

Quote:

Originally Posted by gauss My 2 thoughts are: #1) Could you do a 72(t) plan to get you to age 59 1/2 without a 10% early withdrawal penalty? You would have to run the 72(t) plan for a minimum of 5 years, but should be able to access your traditional IRA funds in this manner #2) You say that your 401(k) does not play well with rule of 55 -- Does this mean that your plan will not allow partial distributions once you separate from service? If this is not the case, perhaps that plans could indeed be made to play well together. There is a common misconception that if the HR department does not know about the rule of 55 or explicitly mention it in the plan documents, then it is not allowed. This is untrue. All that is i needed is the ability to take partial distributions once you have separated from service. -gauss

For #2, I was on a phone call with Fido (MC 401K), and the rep basically told me my MC 401K doesn't allow the 55 rule withdrawal. I tried to connect with MC HR, no one seems to know. I read the 401k plan doc. The English in there could be understood either ways. I totally agree that if I can make the partial withdrawal, all should be good since I will be dealing with the IRS from that point. So far, no one was able to give me an answer, and it is a bit difficult to find out since I am still working.

[Bruno]

Quote:

Originally Posted by ut2sua For #2, I was on a phone call with Fido (MC 401K), and the rep basically told me my MC 401K doesn't allow the 55 rule withdrawal.

Is there some benifit to keep it in a 401K? First thing i did was move it all to an IRA so could buy what every i wanted not just was the company offered.

[ut2sua]

Quote:

Originally Posted by Bruno Is there some benifit to keep it in a 401K? First thing i did was move it all to an IRA so could buy what every i wanted not just was the company offered.

Rule 55 only works for 401K (not IRA). If I don't have that, I can move to IRA post RE

[Bruno]

Quote:

Originally Posted by ut2sua Rule 55 only works for 401K (not IRA). If I don't have that, I can move to IRA post RE

Oh ... My mistake when i checked several years ago it was my understanding it was the other way. When i retired mine was in a Fido 401k and i had the option to move to a IRA. Sorry if it confused anyone.

[chassis]

Quote:

Originally Posted by Bruno Is there some benifit to keep it in a 401K? First thing i did was move it all to an IRA so could buy what every i wanted not just was the company offered.

I have a large percentage of my net worth in a previous employer's 401k because of a fund selection I am not able to invest in elsewhere. This may be a factor for people who are considering rolling out of a 401k and into an IRA.

[Dtail]

Quote:

Originally Posted by chassis I have a large percentage of my net worth in a previous employer's 401k because of a fund selection I am not able to invest in elsewhere. This may be a factor for people who are considering rolling out of a 401k and into an IRA.

Absolutely, especially with a good yielding Stable Value Fund.