Author Topic: Intermediate Savings  (Read 618 times)

Math N Money

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Intermediate Savings
« on: May 17, 2020, 08:40:57 PM »
What kind of account do you use for mid-term savings goals?

Do you have regular brokerage accounts for savings that you are planning to use sometime between now and retirement savings?


  • Magnum Stache
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Re: Intermediate Savings
« Reply #1 on: May 17, 2020, 08:59:27 PM »
What time frame are you defining as a mid term goal, and what are the consequences if you don't have the money? Can't buy a house, but no big deal you'll just keep renting? Can't buy a car to get to work, lose your job, end up homeless living under a bridge?

Math N Money

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Re: Intermediate Savings
« Reply #2 on: May 20, 2020, 08:00:18 AM »
I was imagining along the lines of college education for your kids. Something like 18 years out, and you could probably hit any goal you need to with just a saving account, but with such a long timeline it seems to make sense that you should try to capitalize on some market gains as well.


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Re: Intermediate Savings
« Reply #3 on: May 20, 2020, 08:19:46 AM »
My car replacement fund is in a HYSA. 

My kid's college fund is split between a 529 and my Roth IRA.  The plan is to hopefully have enough in the 529 to pay for community college and/or the first two years of university and then make up the difference from the IRA and/or other sources.  Using a parent's IRA is not generally accepted as best practice for college savings.  However, until I'm at a point where I can comfortably max out all my retirement accounts and also set aside more for college, that's what I'm working with.  There's also a better than zero chance that his grandparents have or will set up an educational trust for him, so while it's not something I'm counting on, it's something that I have to consider when deciding how much to save and which accounts to save in.


  • Pencil Stache
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Re: Intermediate Savings
« Reply #4 on: May 20, 2020, 09:31:25 AM »
For college savings, I prefer target date funds.  They're simple, and they become more conservative over time.  College funds also typically aren't large enough to warrant more complicated vehicles.  This is an option in the 529 plans I've used.

Other things I've done include CD's, Money Market Funds, and higher yielding bond funds (when I'm willing to accept some risk). 

Another good option is the direct purchase of treasury bonds, as you have certainty on the expiration date and expiration value.  Obviously, this is a better choice in higher interest rate environments than we have today.