temporary safe assets for IRA and 401K

[ugh3012]

Hello. My IRA that was rollover from old job and my current 401k is with Vanguard. I want to transfer the funds to safe assets for time being. I might lose my job and with the way things are going, I want to protect what I have now until I retire in few years or find a new job. So, I want to move my funds to safe assets, how do I do that? I am not an Invester, I just chose a target fund year and forget about it years ago. So I have no clue how to put it in safe assets for time being. Safe assets like maybe Bonds or CD? Basically, a fund that is not going to grow or loss and it would be count as early take out and get hit with penalty and pay taxes.

[disneysteve]

Welcome to the site.

If you want to put the money into something that can't lose value, you need to first determine your time frame. When will you need that money? Once you have that answer, you can purchase CDs or government bonds that mature at the time you want access to the money. They could be sold before maturity but you might lose some principal if you do that so it's best to match the investment duration to your desired time frame. You DO NOT want to put the money into any type of mutual fund or exchange traded fund because those can lose value. You only want to purchase individual CDs or government bonds.

As for penalty and taxes, that's dependent on when you take the money out, not how it is invested. If it is retirement money, you generally pay a penalty for taking it out before you turn 59-1/2. There are a few exceptions to that rule that you might want to familiarize yourself with.

[myrdale]

Hello. My IRA that was rollover from old job and my current 401k is with Vanguard. I want to transfer the funds to safe assets for time being. I might lose my job and with the way things are going, I want to protect what I have now until I retire in few years or find a new job. So, I want to move my funds to safe assets, how do I do that? I am not an Invester, I just chose a target fund year and forget about it years ago. So I have no clue how to put it in safe assets for time being. Safe assets like maybe Bonds or CD? Basically, a fund that is not going to grow or loss and it would be count as early take out and get hit with penalty and pay taxes.

To restate what disneysteve mentioned about time frames: How old are you?

If you said you're +60 years, it might be worth considering something "safe". But keep in mind safe = will not grow. If you're under 50 I'd argue you need your money in the market.

[ua_guy]

Target Date funds are traditionally "safer", as their risk profile changes as they get closer to the target date. So, if you're closer to retirement, that fund will already be invested in less risky assets overall, versus if you still have 30 years left, the fund assets should be in an aggressive growth profile.

That said, it might be worth considering diversifying, depending on your situation (which only you know!). How are your non-retirement assets? Things you can reasonably control over the next time period, aka "the way things are going." Do you have a fully topped-off emergency fund? Have you done some planning for eventual expenses, including healthcare? If you have debts, are you working to rid yourself of them where it doesn't make sense?