Low-Risk / Safe Haven for Roth Conversion Cash?

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JDSwim3
Posts: 24
Joined: Mon Dec 07, 2020 5:51 pm

Low-Risk / Safe Haven for Roth Conversion Cash?

Post by JDSwim3 »

I'll be converting a bunch of tax deferred savings to Roth over the next several years to manage eventual RMDs.

I've already set aside cash for the phased conversions. I'm retired, so won't be generating new cash.

Question - rather than just parking the cash in a high yield online savings account at 0.50-0.60 APY, any suggestions on other very low-risk investments that could better that earnings rate?
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David Jay
Posts: 10018
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Low-Risk / Safe Haven for Roth Conversion Cash?

Post by David Jay »

Sorry, but at today’s interest rates there just isn’t any yield out there in any interest-bearing products. Bond funds aren’t expected to do much better.

If you will be doing conversions for a number of years, you could pick up a 3 year or 5 year MYGA (annuity) for the out-years, but you need to be over 59.5 to withdraw the funds without penalty. These are paying in the upper-2% to low-3% range.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius
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