athenianParticipantStatus: PhysicianPosts: 2Joined: 01/10/2018
What reason would someone have to put retirement money into a money market fund? I have the option to keep my 403b money in a US gov money market fund (ticker RADXX). Besides a somewhat high expense ratio (0.68) and missing out on larger gains from the market, is there any real problem with them – can you lose money?
I considered switching my money into this fund while getting settled in a new job, re-configuring my asset allocation, moving some money around, etc, and I kinda view this as a savings account that sits under the 403b umbrella (and can’t be touched for years). Do people use this to time the market and shift their funds here if they think the market is going to fall? Or do folks nearing retirement use it to lock in a nest egg with no risk of it shrinking with the market? I know there are better asset allocations for retirement years, and that you shouldn’t time the market, but just curious.
I mostly see this topic mentioned with regards to emergency funds, and not retirement.May 13, 2019 at 7:09 pm MST #214388LordosisParticipantStatus: PhysicianPosts: 1654Joined: 02/11/2019
Cash has two big advantages. It is not going to lose value in the short term. And it is liquid. Locking your cash up in a 403b takes away the liquidy.
I am sure some people use it to time the market. And I am sure some because they do not know any better.
It might have some value on the eve of your drawdown to move some to cash.
“Never let your sense of morals prevent you from doing what is right.”May 13, 2019 at 7:17 pm MST #214390GParticipantStatus: Physician, Small Business OwnerPosts: 1749Joined: 01/08/2016can you lose money?Click to expand…
yes, to inflation.I considered switching my money into this fundClick to expand…
Are you planning on liquidating your 403b to use for current expenses?Do people use this to time the market and shift their funds here if they think the market is going to fall?Click to expand…
Probably, although they’re wasting money by tilting at windmills.Or do folks nearing retirement use it to lock inClick to expand…
Probably, although it is interesting that Vanguard doesn’t use it and Fido uses only 9% for their 2015 target date funds….May 13, 2019 at 7:46 pm MST #214399