I became unemployed in 2020 due to covid, but have a comfortable emergency fund. I'm not rolling in the dough, but I think I have some excess funds just sitting there (and in a horrible yield savings account). I estimate between 2-3 years of funds if I were to continue to be unemployed. I'm also considering between Index Funds and Roth IRA while being unemployed right now.
How should one assess how much money to invest after padding an EF? I feel like I just want to hold on e excess cash due to past trauma with poverty, but I also feel bad that I lost out on a year of investing already. I've only been working professionally for about 3 years and didn't max out the 401k while I was employed :( My 401k is a Vanguard targeted date fund (managed account the whole time, unfortunately, as an investing newb).
Roth IRA questions
- Would it be a smart move to invest some amount of $ in a Roth IRA by Apr. 15 of this year? I read that you have to have been working to contribute. Does this mean that being employed early in 2020 makes it eligible to contribute to a Roth?
- I read that you can withdraw contributions early from a Roth without penalty. Does this mean that if I don't withdraw the EARNINGS, then I wouldn't be hit with the penalty? So If I really had to withdraw from the Roth, I'd just leave the earnings in there and withdraw those penalty free when I'm eligible (59.5 yo).
Apologies for the dumb questions-- I've been reading about Index Funds for 4 hours on a Friday night (lol still confused about them), so I hope my information isn't clouded haha
Submitted April 02, 2021 at 03:43AM by throwitsb https://ift.tt/3cGvibI
