Asset Allocation

[jIM_Ohio]

i've just been opening a $1000 CD every month for a one-year term...when the one comes due, I renew it for a 2-year term, and open a new one for a 1-year term...

probably Bass Ackwards

I might suggest opening for 13 months. Yields for 13 months at my bank are much higher than they are for 12 months.

$1000 this month for 13 months
$1000 next month for 13 months
repeat 11 more times (for 13 13 month CDs)

point of note- try to always do this on the same number day of each month- like the first or the fifth of each month. If one month is the first, then another month is the 6th, then another month is the 15th, eventually a 390 day period might actually get two CDs maturing in same month or something like that when building the ladder.

At my bank I have a 10 day window from maturity date to get penalty free access to money.

[anonymous_saver]

A Traditional IRA is out of the question, as the maximum AGI to make a partial contribution is $61,999. This is the case as both husband and wife are eligible for employer sponsored plans.

A Roth IRA is possible, as the maximum AGI stated above is $122k, and the maximum AGI for a full contribution is $150k. It phases out from $150k-$159,999k. If you can, definitely stash some cash in a Roth, as you cannot put any more into your 401k, but all your earnings will grow tax free in your Roths. You can put a maximum of $5k in your Roth and a Roth in your wife's name for a total of $10k each year.

Just an FYI for anyone who is interested for 2008, the new Roth IRA income limits are:

The ranges, for 2008, are:
Single filers: Up to $101,000 (to qualify for a full contribution); $101,000-$116,000 (to be eligible for a partial contribution)
Joint filers: Up to $159,000 (to qualify for a full contribution); $159,000-$169,000 (to be eligible for a partial contribution)