I have a bunch of bonds that just matured and I'm looking for something to put them back into. I would like something that I could barrow against or withdraw from if that is possible. I'm not real familiar with all my options and I trust you guys more than the bankers. lol

A ROTH IRA allows you to withdraw the money you put into it after 5 years while any profits it has made stay in the account to grow 'till you're 59 1/2. You can only put 5500 dollars in each year 'till you are 50, then it goes up to 6500/year. It's a great place to put some of your investment money

Investments in a Roth must be earned income - from a job. Now if you have other income you can use and put your earned income in the Roth that is allowed, but you can't just put any money in a Roth. As a retiree with pension and investment income only, I cannot contribute to a Roth. If you are working and can use the bond income for expenses instead of your regular income, you could invest your regular income in a Roth. The beauty of a Roth is that the income earned is exempt from federal income tax.

Reinvesting in bonds in the current market is not a good option. There are other investment options managed for income that are currently used in place of bonds in a balanced portfolio. You need an investment advisor (or three) to give you options and select the one that you are most comfortable with.

If one is still working can't he use any after tax money into his ROTH-dividends, stocks sells etc...?

There are options for you but if you go to a financial institution and use an advisor they will charge you for handling your money. Be careful, I would advise you to have one of them work your money. The fees are high and costs to have them move sell and buy.

As far talking to them that is one thing but letting them handle it is another. Not sure how old you are and what risk level you have but there are some great places to put that money to work for you. Good luck.

Yes if one is working one can put in the maximum amount based on age or up to and equivalent to what ones earned income is. I am considering getting a job for some spare cash but also to put some funds in Roth IRA as an investment that is not taxable to heirs or me in the future. I can't make enough profit with a small farm and fur to put any money into an Roth. We did some Roth's earlier but should have done more.

Bryce

How soon would you need any of it is the first question to answer. With a time table of less than a couple years be safe with it. If you have a longer time horizon 5-10 years you can get more aggressive. Also I keep a fair amount of cash in a regular old savings account. I can borrow against it for 2% and pay back a loan from monthly incomes and yearly incomes.

You are thinking about today, that is not what your attention needs to be on. Interest rates are going to be rising steadily as an attempted control on inflation. Inflation is caused by America exporting the oil overseas instead of dropping our energy prices. Couple that with Eurasia is divesting itself of petrol dollars so all that debt DC is spending means those dollars have no purpose or oil to absorb them as Euros and Gold are a growing oil exchange.
All of that adds up to stock market shares falling in a bear market. In other words do not invest in stocks at this point as they will fall in value.
Do not invest in precious metals even if they go up in huge leaps, they have risen in price because the dollars are that much cheaper.
In most instances if you invest in bonds, you can still sell or withdraw from them in a penalty. That is where those with volumes of investments are moving toward again is the bond market.
There simply are not wonderful investment opportunities for small investors. The retirement accounts will have you paying taxes later when you can not afford them. Investment now is a bank CD pays nothing and inflation is eating the money as it sits there.
Your best secure option is short term bonds as what you are pulling out of. A risk is if you are talking sizeable amounts of money is the option of property as real estate is losing value and will continue to do so. An affordable house though, and if you can do the maintenance, pay insurance and find secure renters you working your money produce better than Wall Street.
Hard assets (not paper that says you own gold) and cash, and that includes bonds are what will be the most secure in the readjustment which is due. I knew people in Clinton's Dotcom bust who had a million dollars in stock and afterward they were cleaning houses to make ends meet. Just always keep in mind of put your money where it is not going to be wiped out if something happens.
I hope something in that helps.

what your age ,is first thing when do you plan on retiring

The best advice I got was to get a financial advisor. Most big insurance companies will have an advisor at a lower cost. Their job is to make money with money. Mine is not. Keeping up with stocks and other investments gives me a headache. It's kind of like everything else, if you want something done right hire someone who makes a living doing it. What ever you pay an advisor won't matter in the end you will have more money than you would trying to learn what to invest in.

Thank you everyone for taking the time to respond. I am only 36 but I'm definitely looking tword retirement and I will talk to my guy about a Roth. I wish someone would have explained it to us when we I was in school.

Bonds in a climate of rapidly rising interest rates will lose value. That is indisputable. If you need to preserve capital keep the bond money in a money market and get a positive return until rates stabilize. At your age you should be heavily weighted in stocks to keep up with inflation over the long haul.

You can't borrow against a Roth IRA, or any retirement account for that matter.

As for bond's losing value in a rising rate environment, that is only true if you need to sell it prior to maturity. If held to maturity, you get your original principal back.

-TJ

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There are some screaming buys right this minute in the market this morning. If I was still 36 I wouldn't even hesitate

Terrific advice here, especially for someone your age. I got stuck with the regular IRA and have to pay tax on the money as I use it. For me to get say $35k, I have to take $50k out.
Re read all this several times. You must make the final decision as what to do with your money, I am glad to see you are at least thinking of the future at your age. Congradulations.......jk

It really depends on the tax bracket you are in when putting money in, and then when you take it out. If you are in a higher tax bracket now, it is better to go tax differed up front and then take it out at a lower tax bracket later. Especially as most folks tend to need less income in retirement then they did when earning it all when they had mortgages, car loans, kids, bigger houses, etc. If you are younger, then you will probably be in a low tax bracket, so it is better to pay the tax now on the income and put it into a Roth, and enjoy no taxes later on it. And also plenty of this depends on what state you are in now earning the money, and what state you plan to be in when you start taking it out. Some (like CA), like a huge slice up front. Others, not so much.

-TJ

Money Market

Investing in the hiring of a reputable financial adviser would probably be the best option. Though I’m not one, here are a few investment options that I’m somewhat familiar with:

SnP index fund or Mutual funds with good track records invested in a diversified portfolio of stocks should give you an average annual rate of return of 10-12% over a long period of time. Shares can be bought or sold at any time, but there is risk involved and it shouldn’t be done for short term investing if you can’t afford to lose any of it. A fee is charged to pay investment managers, mine is around 1.5% per year.

Rental properties obviously should only be bought if you are willing to deal with the hassle of maintaining the property and dealing with tenants. If bought for a good price and managed well, they should outperform mutual funds if you figure the rental income, value appreciation, and tax savings.

Forest land is one of my favorites because you can hunt, trap, camp, etc. on your investment all while getting a decent rate of return.
I’ve seen 8% as a ball park rate of return, but I’m not sure how accurate that is. You should at least have your timber growth+whatever inflation rate is to compare to other options. If you need some of that money in the future, selling off some of your timber is an option.

Another option is if you know of a small business that uses a line of credit to fund inventory etc. and you have a good relationship with the owner and trust him 100% to pay you back he may be willing to borrow from you and pay you the interest he would otherwise pay the bank.

Another thought is to diversify investments and I don't mean just in the market from fixed to securities and or large cap, mid cap, value versus growth either.
There are several other investments that can spread risk and be liquid as well and some allow you to use some borrowed funds if the growth or revenue stream looks good.

Also invest in self, by that I mean maintain good health that will save money as well as education, certifications etc. Earning better incomes allows more investments so don't just think about what you save for investment, also budget well with the money you don't save for investments.

Bryce