When Roth conversions make sense

[kathyc2]

1 hour ago, mcb39 said:

The caution is to always leave enough of a cushion in regular savings for emergencies, if needed.

I look at that differently than you. If the money was sitting in a savings account, the interest earned would be minuscule.  I suppose it may vary by institution, but with my CU, I can get to the full or partial amount in a CD at any time.  Only lose out on some potential interest which wouldn't have been earned in a saving account anyway in the unlikely event of an emergency.   

[Lee B]

I have money in a savings account that is currently earning 4.0 %

[mcb39]

The main concensus of this thread is to have available money somewhere.  Whichever venue you choose, just DO it.  I read somewhere that only 20% of taxpayers have $2000 or more in a savings account.  It is probably even less at the present time.  

[kathyc2]

2 hours ago, Lee B said:

I have money in a savings account that is currently earning 4.0 %

Wow!  My CU pays .05% for savings account.  They have a MM account that is currently 3.3% but you need a minimum balance of 10K.

[kathyc2]

1 hour ago, mcb39 said:

The main concensus of this thread is to have available money somewhere.  Whichever venue you choose, just DO it.  I read somewhere that only 20% of taxpayers have $2000 or more in a savings account.  It is probably even less at the present time.  

I'm sure that's true.  I'm guessing the majority of those that can't have eaten out at least once in the past week.  It goes back to wants vs needs:  you need to eat, but it's a want to eat out.

[jklcpa]

Vanguard's MMA currently has a yield of 4.66%

[kathyc2]

2 hours ago, jklcpa said:

Vanguard's MMA currently has a yield of 4.66%

American Funds has one similar.  The only problem is transfers take a day or two.  I like having a few thousand immediately available at my CU.  I've never had a situation where I needed to have funds available that quickly, but I like the security of having it there. 

[mcbreck]

16 hours ago, kathyc2 said:

Wow!  My CU pays .05% for savings account.  They have a MM account that is currently 3.3% but you need a minimum balance of 10K.

Get an investment account somewhere. With the ability to do an ACH into your checking account in an emergency, the fund doesn't have to be at your bank. Just monitor if the account has a yearly fee and ACH fees. IPPXX has a 7 day yield of 4.86% but has a $1k minimum. Fidelity MMs are around 4.35% and no minimum.

ACH is next day.

[Lion EA]

Morgan Stanley pays 4.24% with NO minimum balance, just under 5% for different MMs &/or balances. (Accounts way out of my reach pay even more.)

[mcb39]

My CU pays .995 on savings accounts with immediate phone or online transfer to checking account if necessary.  Over the last 18 months or so they have been paying 4.5 to 5.5 for short-term CDs; minimum of 1000.  I watch it closely as I have a few and one coming due on 12/10/24 which went in at 5.25 and will not renew nearly that high as rates are dropping now.  However, I have one coming due on 3/10/24 that went in at 2.967 for 24 months, which I should be able to renew at a much higher rate; depending on the uncertain economy.  I believe right now that their highest rate is 4.75 and dropping.

I think the real importance of this thread is not where you have it or how you have it; just HAVE it available without penalty immediately.  So few people do and that is a sad situation.

 

[Gail in Virginia]

Even the money that I have invested in stock is much more readily available than used to be the case.  The last time I requested a withdrawal from my broker, I was told it only took 1 day for the trade to settle, and that if I had linked a bank account to the brokerage account I could have had the money transferred into my bank account in about 24 hours.  For most purposes, that is fast enough for me. 

[kathyc2]

1 hour ago, mcbreck said:

Get an investment account somewhere.

Vast majority of my investments are at American Funds including some in their MM fund.  I just feel better having some locally that I can access in a minutes notice in the unlikely event such as a widespread and prolonged internet outage. 

[jklcpa]

59 minutes ago, kathyc2 said:

Vast majority of my investments are at American Funds including some in their MM fund.  I just feel better having some locally that I can access in a minutes notice in the unlikely event such as a widespread and prolonged internet outage. 

In the event of prolonged internet outages, banks, credit unions, and investment houses may not be able to access information systems, investors accounts, or be able to transact business.  That is something you should probably ask of your CU.