Funds that can be used as quasi-savings accounts / beat inflation with low risk to principle

[Reality]

Brehs, I have a Roth IRA with Fidelity and am looking to transfer $5.5k in cash from my savings account to the Roth to max out my contribution for the year.

I want to treat the $5.5k as a quasi-emergency fund, so I'm looking for a fund with a risk return profile that should have me comfortably beating inflation with low probability of losing principle. Any recommendations?

 

[Truefan31]

Just do an ETF or mutual fund that tracks the market. On average you'll get around 7-12% annually, far more than inflation. And good job starting a Roth IRA, it's such a great asset.

 

[Reality]

Just do an ETF or mutual fund that tracks the market. On average you'll get around 7-12% annually, far more than inflation. And good job starting a Roth IRA, it's such a great asset.

Should've clarified, I already have like $50K in a Fidelity mutual fund but am looking for something less risky. I want like 3-4% returns so i can use the fund as a semi-savings account.

 

[Sugarbush]

Should've clarified, I already have like $50K in a Fidelity mutual fund but am looking for something less risky. I want like 3-4% returns so i can use the fund as a semi-savings account.

CD?

 

[Perfectson]

Should've clarified, I already have like $50K in a Fidelity mutual fund but am looking for something less risky. I want like 3-4% returns so i can use the fund as a semi-savings account.

Why would you put a semi-savings account in a Roth IRA. Despite the asset being liquid the Roth is a poor vehicle to deliver what you're asking due to penalties .

Would more info for an opinion but someone mentioned a CD, perhaps laddering that CD so you have access monthly/quarterly to the full principal without taking unnecessry erosion of return .

You could look at a good reit fund or stock fund....I'd stay away from bond funds at the moment for what you're trying to do.

You could actually buy real bonds if you don't care about duration risk

 

[Reality]

Why would you put a semi-savings account in a Roth IRA. Despite the asset being liquid the Roth is a poor vehicle to deliver what you're asking due to penalties .

Would more info for an opinion but someone mentioned a CD, perhaps laddering that CD so you have access monthly/quarterly to the full principal without taking unnecessry erosion of return .

You could look at a good reit fund or stock fund....I'd stay away from bond funds at the moment for what you're trying to do.

You could actually buy real bonds if you don't care about duration risk

What penalties, though? It would be post-tax contributions and I don't care about having access to the gains. Want the money growing but don't need access to earnings.

 

[Perfectson]

What penalties, though? It would be post-tax contributions and I don't care about having access to the gains. Want the money growing but don't need access to earnings.

You still pay tax on qualified earnings in a Roth . So what would be the point if you plan on taking the money out, Im referencing that you called it a semi savings account, which I may have mistaken that you wanted liquidity out of it

 

[Reality]

You still pay tax on qualified earnings in a Roth . So what would be the point if you plan on taking the money out, Im referencing that you called it a semi savings account, which I may have mistaken that you wanted liquidity out of it

Yeah, I could've been clearer. I want to have my money growing / protected from inflation but with access to the principle.

 

[Perfectson]

Yeah, I could've been clearer. I want to have my money growing / protected from inflation but with access to the principle.

i still question why you want a roth ira. If you want access to the principle i would think you just get a nice fund in a brokerage account or a fixed income asset

 

[FSP]

Crypto is the answer for every thread in this sub

 

[Perfectson]

Crypto is the answer for every thread in this sub

Lol, how much are you in the red tho...he's trying to maintain principle

 

[Larry Lambo]

So you want something that provides a guaranteed 4-5% return with the ability to access your funds without penalty.

I doubt that exists but would love to be proved wrong.

 

[Truefan31]

You still pay tax on qualified earnings in a Roth . So what would be the point if you plan on taking the money out, Im referencing that you called it a semi savings account, which I may have mistaken that you wanted liquidity out of it

I think there's some confusion here. A Roth IRA is already taxed contributions, and the earnings are also tax free. As long as you only need the CONTRIBUTIONS, there's no penalty or tax. You only pay tax on qualified earnings if you take out the Roth earnings before the age of 59 1/2.

The Roth IRA is like a super savings account that's also a retirement account. Keep putting 5500 a year in, let it grow and earn, and try not to touch it. But in severe emergencies if you need it, you have access to the CONTRIBUTIONS at any time no penalty.

 

[Truefan31]

So you want something that provides a guaranteed 4-5% return with the ability to access your funds without penalty.

I doubt that exists but would love to be proved wrong.

It does, its the Roth IRA. Just don't touch the earnings. (try not to touch it anyway though)

 

[Larry Lambo]

It does, its the Roth IRA. Just don't touch the earnings. (try not to touch it anyway though)

Roth IRA is not guaranteed earnings. It can go up or down.