My prior employer distributed $2,000 to me from my 401(k). Is it advisable to convert that money into a CD instead of putting it into another 401(k) advisable?

My prior employer distributed $2,000 to me from my 401(k). Is it advisable to convert that money into a CD instead of putting it into another 401(k) advisable?
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#1

I’m 60. The $2,000 would not be enough to change my tax bracket. I’m assuming it will be added to income for this year and would continue adding the interest to earned income, whereas a 401(k) wouldn’t.


#2

True regarding taxes, however you can’t put that money into another 401(k) unless by chance it was less than 60 days ago that you received it. If so, let me know.
Otherwise, it’s no longer retirement money. You could take that and put it into a CD, but the only reason to do that would be if you knew you needed that money sometime soon-ish and it was way more important that it be preserved nearly whole instead of risked to maybe grow. CDs pay very small amounts of interest and you can do better if that’s right for you.
Disclaimer: I’m not an attorney or a CPA, and you might need one. What I do is help people with their eventual non-working future.
I specialize in financial education and collaboration and I’m a reformed broker who can help you make it happen without the high cost.
Schedule a free 15-minute call here: http://bit.ly/omgfreeconversation.
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#3

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