Red Badger
Thinks s/he gets paid by the post
Hello FIRE team. Freshly minted retiree here (June 2017). I just read audreyh1's post on EOY higher rate CD's. While not wanting to hijack her topic, I do want to pile on with a question.
I have $80K in "beer money" that I want to tap into (fairly evenly) over the next ~2 years. My thinking is to put $20K into a MMA and the balance ($60K) into a decent yielding 6 month CD. Upon maturity, I would harvest another ~$20K and purchase a $20K 3 month CD and a $20K six month CD. This would cover my 2 year window without any $$ being tied up over six months. If interest rates go up, I may be able to purchase a higher yielding product upon maturity - that's why I'm shying away from 9-18 month products.
I currently have this money in ST index bond fund (from a very recent 401K rollover from Net Benefits to FIDO), but would prefer a modest loss of opportunity for a smaller but "locked in" gain. I also have plenty of SHTF cash, so could cover any emergencies without early CD redemption.
A few final caveats; I'm a buy and hold index investor, and I leave chasing returns in my equities side - for assets, it's all about diversification and reduced volatility. I'm meeting with a local FIDO adviser later this week and am doing my homework.
While $80K is a bit of a pittance, it's for a good cause (beer and stuff).
So, my question... execute CD plan, different CD tactic, of leave in short term govvies? Any sage advice from the council of elders?
Thanks!!!
I have $80K in "beer money" that I want to tap into (fairly evenly) over the next ~2 years. My thinking is to put $20K into a MMA and the balance ($60K) into a decent yielding 6 month CD. Upon maturity, I would harvest another ~$20K and purchase a $20K 3 month CD and a $20K six month CD. This would cover my 2 year window without any $$ being tied up over six months. If interest rates go up, I may be able to purchase a higher yielding product upon maturity - that's why I'm shying away from 9-18 month products.
I currently have this money in ST index bond fund (from a very recent 401K rollover from Net Benefits to FIDO), but would prefer a modest loss of opportunity for a smaller but "locked in" gain. I also have plenty of SHTF cash, so could cover any emergencies without early CD redemption.
A few final caveats; I'm a buy and hold index investor, and I leave chasing returns in my equities side - for assets, it's all about diversification and reduced volatility. I'm meeting with a local FIDO adviser later this week and am doing my homework.
While $80K is a bit of a pittance, it's for a good cause (beer and stuff).
So, my question... execute CD plan, different CD tactic, of leave in short term govvies? Any sage advice from the council of elders?
Thanks!!!
