I’m 50 and have $5 million in cash sitting in my IRA – I want safety but hate losing returns, where should I put it?

The hope is that one day, you will have to consider what to do with a significant amount of money, believing it will grow and grow and grow. If you are fortunate enough to have millions of dollars that you want to grow more, then you certainly have done something right. 

This is the exact situation with one Redditor who posted in r/fatFIRE as they recently sold off some large stock positions, giving them an approximate net worth of around $5.3 million. Their hope is that Reddit can guide them on what to do instead of buying a whole bunch of new stocks. 

If you have $5 million, don’t need any of it immediately, and want it to grow, then I’ll reiterate again that this Redditor certainly did something right. 

Large Cash Position 

From the initial Reddit post, we know this Redditor recently sold off a number of different stock positions, which gave them their current net worth of around $5.3 million. As they are uncomfortable going right back into the market, they want to do something a little bit safer, understanding they are considering themselves very close to retirement. 

In a surprising turn, an honest Redditor admits that they don’t know enough about bonds or treasuries to learn the proper next steps. They also don’t know a lot about short-term, low-risk options, but they do own a number of very short-term treasury and corporate bonds that were recently purchased. 

Ultimately, they are hoping to put at least $1 million into something low-risk, and if they only gain 4-5% annually, this is totally okay. They would also like to take another $1 million and invest it into something that has slightly more upside, like between 5-10%. The rest, or the other $3.3 million, would be kept in an IRA until they see another opportunity present itself. 

What To Do Next

One of the first recommendations that gets a lot of support from the Redditors is to put all of the money, the $2 million, into large short-term treasuries until the Redditor knows enough to make the right choice. The monthly dividend would be around 4-5%, and there is almost no risk of losing out on the investment. 

From there, the Redditor can start learning about everything they can do with their money to make the right decisions and know when to get back into the market. 

In addition, there is also a consideration that right now, you could get around 4.5% in 12-18 month CDs, but you’d only be able to invest up to $500,000 per account and still have that money insured. The Redditor can also consider anywhere between 6-18 months of treasury bills as there is no cost involved, and it’s as “guaranteed” as you can get in the market right now. 

Be Careful With Risk

One of the things this Redditor needs to be most careful of is that any attempt to earn a 10% return on an investment is certainly not low risk. You can do this in the market if you get in at the right time with the correct picks, but it’s very much a high-risk game. 

To say it more concretely, there is a non-zero chance this Redditor can find something with nothing but upside or low risk that would even get close to 10% without doing something that is likely not smart. 

The best case scenario here is to invest in short-term treasuries while learning about the other potential scenarios so that when this Redditor feels ready to cash out of any treasuries, they know exactly where they want to go next. 

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