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|Subject: Re: Where to put 403b||Date: 5/16/2013 4:22 PM|
|Author: BruceCM||Number: 72244 of 77407|
I don't mean to challenge you as I ask more from the standpoint of curiosity.... but how did you get $1MM into a 403(b)? Even if you maxed out every year's contributions for 30 years, that would amount to about $250K by my rough calculation using past year's max salary deferrals, and investments are restricted to, usually, crappy mutual funds and even crappier annuities. I've seen many many 403(b)s, and I've never seen one even close to $1MM...at least a 403(b) that hadn't gotten a rollover from another plan or IRA. As I say, just friendly curiosity, if you don't mind sharing :-)
But to your question of protecting $800K. You could use TIPS, but you'll get virtually no return at today's rates and you could lose value if there were a period of deflation...however unlikely. Another option are CDs, with the interest rate dependent on how long you can tie the money up...but you'd want to split it up between the CD sponsor's to get the full FDIC protection.
Keep in mind that if you wish to use these dollars for future income or future expenses, anything today with low interest/return rates mean you will be losing purchasing power. This sounds like it could be your greatest risk.
If you don't mind taking a few baby steps up the risk scale, you could invest in short duration bond funds offered by the likes of Vanguard.
And you don't say...but clearly you have taken investment risk to achieve a 403(b) this large, again, assuming no external rollovers into it. So why do you want to switch from what would seem to be considerable investment risk to essentially no investment risk?
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