I have about $250,000 set aside to cover any long-term care needs that my 87-year-old mother may require. I hope to double the amount of this set-aside over the next couple of years. The money is in a taxable account at Fidelity, and my tax rates are 24% federal and 9.3% California. I have no idea when the money will be needed -- could be tomorrow, could be in two years, could be in 10 years, could be never. I consider this money comparable to the second tier of an emergency fund, as I could cover any immediate needs for Mom out of my checking account. I'm considering these options:
1) 4-week Treasury bills on auto roll at Fidelity (safe, but would mean $500,000 was earning next to nothing if T-bill yields fall substantially in the next few years).
2) SGOV - iShares 0-3 month Treasuries, expense ratio .09% (slightly more convenient than T-bills on auto roll but also a bit more expensive than buying T-bills directly).
3) STIP - iShares 0-5 year TIPS, expense ratio .03% (modest volatility/duration risk, slightly higher expected returns, and some inflation protection, which I view as a plus).
What should I do?
1) 4-week Treasury bills on auto roll at Fidelity (safe, but would mean $500,000 was earning next to nothing if T-bill yields fall substantially in the next few years).
2) SGOV - iShares 0-3 month Treasuries, expense ratio .09% (slightly more convenient than T-bills on auto roll but also a bit more expensive than buying T-bills directly).
3) STIP - iShares 0-5 year TIPS, expense ratio .03% (modest volatility/duration risk, slightly higher expected returns, and some inflation protection, which I view as a plus).
What should I do?
Statistics: Posted by jaMichael — Wed Jul 03, 2024 12:31 pm