Where to park 100K for 3 years

[MN_1021]

Hi all,

This question may have been asked a 100 plus times (so my apologies) but my query is more relevant in today's times when stock markets are at their all time peaks.

I recently received 100K in inheritance. I am planning on ER in ~ 3 years when I will be 50. I would love to use this money to travel a bit more than I was planning for. Where can I park this money for 3 to 4 years. I am OK if I only get very minimal returns. Very happy if it covers for inflation. Most of my current savings are tied in deferred comps and 401K (ETF, age based MF's etc.). I don't do much of post tax investing and am inexperienced with bond and other low risk investing tools.

Appreciate your guidance!!!

 

[MRG]

https://www.early-retirement.org/forums/showthread.php?t=106438

Think this might have some ideas. I picked up one a year ago and it's nice and boring. There's a number of other threads with more discussion.

 

[Ncc1701]

IMHO, If I was looking for something a step above money market, I would use VTAPX. Duration is 3 years so keep that in mind.

 

[Finance Dave]

Oops...posted my response in the linked thread above...

copied and pasted here....

We bought one of these ("private placement" annuities) within our FIDO TIRA recently. I wanted highly rated insurer, so we are only getting 1.7% but that's much better than CD rates of .5%. We just did $100k for now, as I wanted to see how it works. Once we get comfortable, we may open 3-4 more and spread them amongst insurers.

The one downside is all the legal requirements...we had to be "interviewed" by our adviser on the phone, then sign a bunch of documents online via Docusign, then got a huge contract in the mail. Just takes a little time to go through all this.

 

[Dtail]

Oops...posted my response in the linked thread above...

copied and pasted here....

We bought one of these ("private placement" annuities) within our FIDO TIRA recently. I wanted highly rated insurer, so we are only getting 1.7% but that's much better than CD rates of .5%. We just did $100k for now, as I wanted to see how it works. Once we get comfortable, we may open 3-4 more and spread them amongst insurers.

The one downside is all the legal requirements...we had to be "interviewed" by our adviser on the phone, then sign a bunch of documents online via Docusign, then got a huge contract in the mail. Just takes a little time to go through all this.

Just did the same thing for my parents trust at the same 1.7% yield. Not willing to go to a lower rating for them, but would consider one for myself.

 

[chassis]

How about $50k in SPY and $50k in a high yield savings account? Complete liquidity with some upside potential. I cringe to think of locking my money away in a vehicle with strings attached such as an MYGA, CD or similar.

Markets are at all time highs today, as you point out. There will be new all time highs, with 100% certainty. When the all time highs will arrive, no one knows. But the market will be higher then, than it is today.

 

[2017ish]

If it were me, I'd put it in VFSUX. Decent return (under present conditions), and not very much principal risk. (We have 4 years spending of "cash" in that fund right now.)

 

[kjpliny]

How about $50k in SPY and $50k in a high yield savings account? Complete liquidity with some upside potential. I cringe to think of locking my money away in a vehicle with strings attached such as an MYGA, CD or similar.

Markets are at all time highs today, as you point out. There will be new all time highs, with 100% certainty. When the all time highs will arrive, no one knows. But the market will be higher then, than it is today.

Nothing is 100% certain. This thesis could be wrong. It's been 32 years since Japan's market highs, and they're still down by 20% from 1989.

 

[chassis]

Nothing is 100% certain. This thesis could be wrong. It's been 32 years since Japan's market highs, and they're still down by 20% from 1989.

Yes, of course. And a meteor could hit the earth tomorrow.

We all die, that is 100% certain.

How about $50k in SPY and $50k in a high yield savings account?

 

[brentnice]

What about I Bonds? You can buy them from the government on the TreasuryDirect.gov website.

From what you describe... 3 year timeframe, no risk of losing money but keeping up with inflation... this would be a perfect investment for you.

You are locked in for 12 months but afterwards you can withdraw at any time. The returns are guaranteed to keep up with inflation if not outpace it. Oh, and the earnings are not taxable at state level and tax deferred until redemption at the federal level. Great cash investment within your taxable portfolio.

So yeah, why not I Bonds?

 

[Dash man]

What about I Bonds? You can buy them from the government on the TreasuryDirect.gov website.



From what you describe... 3 year timeframe, no risk of losing money but keeping up with inflation... this would be a perfect investment for you.



You are locked in for 12 months but afterwards you can withdraw at any time. The returns are guaranteed to keep up with inflation if not outpace it. Oh, and the earnings are not taxable at state level and tax deferred until redemption at the federal level. Great cash investment within your taxable portfolio.



So yeah, why not I Bonds?

There’s a $10K maximum per year.