$10,000 in Savings-Should I put half in Roth IRA?

How much other cash do you have on hand besides this $10k your talking about here?

Quote from nizzy1115 : How much other cash do you have on hand besides this $10k your talking about here?

None, no debt but other than that there is nothing else liquid.

Buy 5 oz of gold and put the rest in silver.

It depends on the degree of liquidity you desire (although you could direct your roth funds into something that can be cashed out quickly in the event of an emergency). Keep in mind that although you can take out anything you put in without penalty, any earned interest will be subject to a hefty penalty if you do so before retirement (exception: up to $10k of it can be used for a first time home purchase if the roth IRA is 5 years of age or older).

My suggestion: If you can survive for 3 months on only $5000, then go ahead and drop the other 5k into a roth IRA. Otherwise consider funneling it into liquid channels.

I would drop it into the ROTH, and keep building up your emergency fund. You don't need to do the whole $5k now, you could put in enough to open an account and get it set up, and then see where you are in a few months. You could also setup monthly deductions now, and then prior to April 15th put in whatever is required to hit that $5k cap for 2012.

I would do the ROTH, simply because you can always withdraw the principle without a penalty. Leave any earnings in the account so you don't take a hit on them.

Additionally, check your local credit unions to see if any of them has a higher yielding checking account. I live in Oregon, and a local CU has 3% interest (up to $25k) right now. Great for keeping the cash on hand. It's an extra $600 a year for doing what we normally do.

Honestly I think 10k is the minimum liquid cash a family should have. Emergencies can happen fast. After 10k though then I think its fair to start looking into other savings options besides cash.

Quote from nizzy1115 : Honestly I think 10k is the minimum liquid cash a family should have. Emergencies can happen fast. After 10k though then I think its fair to start looking into other savings options besides cash.

Im single, 28 year old, and from what I understand a Roth is fairly liquid if i can withdrawal the principal.

I believe 5K is the max you can contribute to an IRA so put 5 K in the ROTH and the other 5 K in a high yield savings

Ally has a Money Market Savings Account at 0.95% interest I'm sure you could find others at a credit union or something

Quote from SlickDilla : Im single, 28 year old, and from what I understand a Roth is fairly liquid if i can withdrawal the principal.

You're right - it is fairly liquid. A Roth IRA is a great place to keep your rainy day fund.

Just make sure you do a ROTH savings IRA, if this is your only cash, you don't want to risk losing it.

I'd love to find a high yield savings, but the best that I find are around 1%. That's not a very high yield.

Quote from trentsteel68 : I'd love to find a high yield savings, but the best that I find are around 1%. That's not a very high yield.

Check your local credit unions. Just go to Google Maps, search your area for credit unions, and visit their websites. A local one here in Oregon gives 3% back on their CHECKING account. It was recently raised from 2%. It's up to the first $25k, which is going to be the max emergency fund for most. It's an extra $50+ each month, $600+ a year.

They have a few hoops to jump through, but we meet them all with normal day to day activities: Direct Deposit, done. Online bill pay, done (why use my own stamps?). 12 debit card transactions, done (ma and pop stores we frequent and small purchases, easily done). Plus, they also reimburse up to 20 ATM fees for out-of-network ATM use. In the last year or so we've had the account, we've only used this twice.

I have never paid a bank fee on anything except a box of checks every decade or so.

Quote from Serus : I would drop it into the ROTH, and keep building up your emergency fund. You don't need to do the whole $5k now, you could put in enough to open an account and get it set up, and then see where you are in a few months. You could also setup monthly deductions now, and then prior to April 15th put in whatever is required to hit that $5k cap for 2012. I would do the ROTH, simply because you can always withdraw the principle without a penalty. Leave any earnings in the account so you don't take a hit on them. Additionally, check your local credit unions to see if any of them has a higher yielding checking account. I live in Oregon, and a local CU has 3% interest (up to $25k) right now. Great for keeping the cash on hand. It's an extra $600 a year for doing what we normally do.

Mind if I ask which CU? My CU is currently 2.02% up to 10k, which I had been taking advantage of until I locked up the majority of my funds in a short term business deal and will be putting back into the bank (or possibly investments) when that deal is concluded