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Looking to grow our money together

L

LuckyTaxi

Diamond Member
So the fiance and I would like to save money, and what better way than to put it aside in something so that will grow. Not so much for retirement, but something we can look forward to 10 years from now. I have some money going into my 403b, but I'm looking to put something aside that I can't touch for quite some time. I thought about an IRA, but let's say I need the money 5 years from now for something major (car, house, medical bill, etc...)

What should I look into? while retirement is an important topic, I would like to think that the money would be available should I need to withdraw it.
 
Government I-Bond. Currently paying 6.73% and you'll always be protected against inflation.

Must hold for at least 1 year. If you cash out after 1 yr but before 5 yrs, you lose 90 days interest, pretty much like most CDs. Just think of it as 5 yr CD.

Interest is tax free on the state level but you do have to pay federal income tax. Still better than paying both state and federal.

You can buy little as $25. Max is $60k per year. $30k online. $30k at bank.

I-Bond
 
Is this the same girl that was moving out a month ago? Sounds like a great time to be pooling your money into long term investments.


Didnt you also post about having bad credit and getting high interest rates on a car loan?

And there was a post about having to suspend your credit cards so you could continue to make the lower monthly payments.

Not to be a dick...but, I really think you need a long term game plan to get your finances in order and be mostly free of revolving consumer debt before thinking seriously about investing.
 
quick stat on retirement
say you think 40k today is enough to live on once retired. 40k at an inflation rate of 3% is almost 100k 30 years from now. standard convention is to withdraw 4% of your retirement funds to avoid reducing the principal too much and keep up with inflation. to get 100k from a 4% withdrawl, your principal needs to be 2.5 million dollars.

Ibonds are good now, but the interest you get changes every 6 months after you purchase it depending on inflation. if you just want to put money aside for longer term use then that is a good way to keep ahead of inflation.

Consider Roth IRA as well if this is a longer term investment. After 5 years you can withdraw your original principal amount. there are also provisions for withdrawing for a first time house purchase. i'd do some research as this is nowhere near a description of everything it can or cannot do.

5-10 years timeline can also get into regular stocks or mutual fund picks. either way you dont pay taxes any profit you make until you cash them in. you pay taxes on dividends from the stocks/funds but thats fairly minimal.
 
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