And he wrote in to Morning Edition to say he's less than five years from retirement and he's got a 100, 000-dollar nest egg invested right now, in a seemingly safe money-market account.
In most 401(k) plans, to move money from a stable-value account into a money-market fund or short-term bond fund, plan participants have to be invested in a riskier option for at least 90 days.
Money should be direct-deposited from your paycheck to a money market or interest-bearing savings account.
Be aware that taking money out of a retirement account or selling securities at a sizable taxable gain rather than pulling cash from a certificate of deposit, money-market fund, savings or checking account could result in higher taxes on Social Security benefits if it bumps income above a certain threshold.
The Treasury can no longer use its foreign-exchange account to backstop money-market funds worrying, given the exposure of money-market funds to European banks.
Then the participants would have four choices--among three balanced funds and a money market account.
This is often a hard concept to sell because most consumers have been conditioned to think of savings as the near-zero-percent account at the bank or money market funds and CDs.
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But if you have less than five years before your kid sits down to freshman composition, a risk-free certificate of deposit, money market fund or even a traditional savings account is a better bet.
But with the average rate on a savings account at 0.24 percent, on a money market account at 0.22 percent, and on a 1-year CD at 0.53 percent, nominal returns are close to zero, and real returns are negative even at relatively low rates of inflation.
If you are interested in automatic recurring transfers from your checking account, be sure to research money market accounts as well as high-yield savings accounts to see what type has the best terms and options for your banking needs.
Jerry Brown, president of Thorograph, a New York-based firm that provides data and thoroughbred consulting to owners, breeders, and bettors, says the main issue is that the breeder market rewards big, good-looking yearlings that sell for a lot of money, without taking into account their sturdiness.
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