age 55 with $1.73 million saved up

just heard last night I am getting a "severance" - although I actually put in notice of resignation a year ago so this is a total surprise.

15 June will have approximately $50K deposited in the checking account

buy bonds?

keep it in cash?

buy Quantum?

buy space tech?

HYSA

Marauder Blue 6 said:

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HYSA

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could you provide more details about how to structure this and why it would be the best course of action?

all $50K into a HYSA?

OpenBank HYSA is at 3.5%. Robinhood has a new banking feature with HYSA at 4.5%

At 55? I'd put that into an HSA.

BigPete3281 said:

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At 55? I'd put that into an HSA.

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that's going to take a while.. don't want it just sit there for 6-8 years while you're maxing HSA out every year... huge loss in gains.

I forgot there is a cap on those.

VOO

thanks for the advice

I just can't fathom buying into VOO right now when it has just had 35 ALL TIME HIGHS in the past two years

isn't the secret to buy low and sell high?

versus potentially a once in a lifetime opportunity to get Quantum stocks running to the moon, or space tech stocks, or AI.

or at least wait until the next correction before loading into VOO

Time in the market vs Timing the market. Your choice, my friend.

I do get where you are coming from and it totally makes sense.

I Am A Critic said:

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Just park the money in a HYSA until you figure out what you want to do with it.

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This is the obvious step 1 if you haven't figured out where to put the money before receiving it.

Ducks4brkfast said:

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it's 50 grand. just buy the market and don't think about it for thirty years.

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I am 55 years old

I'm not going to be around in 30 years

I am more concerned about the next THREE years

so that I can "semi retire" and have my consulting firm and do part time legal work because I have enough assets to live on

would like to avoid sequence of returns risk approaching two million in savings

I have been a long term Bank of America guy although I did move all my cash to their Merrill Lunch preferred savings which is about 2.9%. The BOA normal checking/savings rate is a ridiculous palty .3%~!

I found this with Claude:

Vio Bank only offers savings products there is no checking account, so you'll need to keep your checking account elsewhere (your BofA account works fine for this)

There are no monthly fees if you go paperless; otherwise there's a $5/month paper statement fee CNBC

FDIC insured up to $250,000

Current rate: 4.03% APY

anyone have experience with Vio?

Severance... and you put in notice a year ago.

Will you be taking a new role somewhere else? Or is this early retirement?

If the latter you could HYSA it as part of your regular runway of annual cash burn for a whatever period of time that lasts and defer other distributions. Another option might be to get with your finance people and see if you can't get it all put into your ROTH 401(k) with some of the backdoor and mega options. Retiring you could then begin accessing those funds this year under the Rule of 55.

I would invest half of it in low risk mutual funds and then take the other half over to my friend Asadulah who works in securities.

Kenneth_2003 said:

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Severance... and you put in notice a year ago.

Will you be taking a new role somewhere else? Or is this early retirement?

If the latter you could HYSA it as part of your regular runway of annual cash burn for a whatever period of time that lasts and defer other distributions. Another option might be to get with your finance people and see if you can't get it all put into your ROTH 401(k) with some of the backdoor and mega options. Retiring you could then begin accessing those funds this year under the Rule of 55.

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great advice but I have always had a salary too high to qualify for Roth

I do have two backdoor Roth set up through Merrill Lynch

it's amazing how great the company treats the employees as I told them a year ago I would be resigning and didn't expect anything

but the Board of Directors voted to give me a very large severance. also I continue as a consultant.

Yep I have some cash in Vio Bank. No issues.

If you want a place to just park it, then again, i recommend Pibank.
It's not great... no ACH, no checking, and the only way to access it is with a phone app (no website).
It is what is its, just a straight up park it/leave it at one of the highest HYSA rates. 4.4%

NOT your ROTH IRA. There are ways to go away over the limits within your 401k.

Doing so within the 401k, would allow penalty free distribution should the need arise as long as it's with your last employer when you retire/semi-retired at 55. As opposed to taking the 10% penalty on distributions taken prior to 59.5.

Google "Rule of 55."

any reason to chase HYSA rates vs just parking into SGOV which has state tax exemptions

+850 for Aggies to win the SEC

permabull said:

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It's 3% of your investable assets... You are way overthinking it.

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Exactly.

Totally " found" money so why not live a little since you are in great shape?

I would put 25K in VTI and have fun with the other 25K. I could go somewhere and do a lot of thinking for 25K.

Congratulations.

Kenneth_2003 said:

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NOT your ROTH IRA. There are ways to go away over the limits within your 401k.

Doing so within the 401k, would allow penalty free distribution should the need arise as long as it's with your last employer when you retire/semi-retired at 55. As opposed to taking the 10% penalty on distributions taken prior to 59.5.

Google "Rule of 55."

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Id fully fund roth if not already. You can withdraw contributions penalty free at any time.

harge57 said:

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Kenneth_2003 said:

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NOT your ROTH IRA. There are ways to go away over the limits within your 401k.

Doing so within the 401k, would allow penalty free distribution should the need arise as long as it's with your last employer when you retire/semi-retired at 55. As opposed to taking the 10% penalty on distributions taken prior to 59.5.

Google "Rule of 55."

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Id fully fund roth if not already. You can withdraw contributions penalty free at any time.

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only after 5 years right?

I Am A Critic said:

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MFBarnes finance threads

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I thought he'd already moved to Israel

62strat said:

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harge57 said:

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Kenneth_2003 said:

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NOT your ROTH IRA. There are ways to go away over the limits within your 401k.

Doing so within the 401k, would allow penalty free distribution should the need arise as long as it's with your last employer when you retire/semi-retired at 55. As opposed to taking the 10% penalty on distributions taken prior to 59.5.

Google "Rule of 55."

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Id fully fund roth if not already. You can withdraw contributions penalty free at any time.

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only after 5 years right?

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I think that is only the case if you backdoor the roth, or if he had not had a roth ira open for at least 5 years. But given the discussion above at hisage and time frame. It won't make much of a difference. Maybe if he was not already maxing a roth ira below the income limit then he could put a portion of it there for the next two years.

LMCane said:

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Ducks4brkfast said:

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it's 50 grand. just buy the market and don't think about it for thirty years.

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I am 55 years old

I'm not going to be around in 30 years

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Why not? Unless you are facing severe health issues now, it's not unreasonable for a current 55 year old to make it to 85.

62strat said:

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harge57 said:

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Kenneth_2003 said:

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NOT your ROTH IRA. There are ways to go away over the limits within your 401k.

Doing so within the 401k, would allow penalty free distribution should the need arise as long as it's with your last employer when you retire/semi-retired at 55. As opposed to taking the 10% penalty on distributions taken prior to 59.5.

Google "Rule of 55."

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Id fully fund roth if not already. You can withdraw contributions penalty free at any time.

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only after 5 years right?

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5 years is for Roth conversion ladder
regular contributions can be withdrawn anytime, just not the gains