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Aug 4 2009 12:00AM


My husband and I recently got married and we want to start investing. We have about $1,500 that we would like to put into either a high-yield savings account or certificate of deposit (CD). Given the current economy, where should we invest this money?


According to Francis St. Onge, CFP®, president of Total Financial Planning, LLC, the first thing to consider is what you might be using that money for and when.

"If you need immediate access to the money, then it should probably be in a savings account with a credit union," said St. Onge.

If, however, you might need the money within the next two years, he recommends investing in a CD with a maturity that matches when you would need access to the money.  "So, if you might need it in 18 months buy a CD to mature in 18 months," he said.  He does not, however, given current market conditions and the possibility that interest rates might rise in the future, recommend investing in CDs with a maturity greater than two years.

If your need for this money is not in the near future and you want to start saving for retirement or some other goal, St. Onge suggests saving money inside a Roth IRA (assuming your Adjusted Gross Income for the year is under $166,000). "The Roth IRA grows tax-deferred and is not taxable when you take the money out in your retirement years," he said. "Another great feature of the Roth IRA is that the amount you contribute can be accessed at any time going forward because you are using after tax-money to make the investment — it is only the earnings that can cause a taxable event and penalties prior to you reaching age 59 1/2."

According to St. Onge, you can contribute up to $5,000 per year for both you and your new husband as long as you have earned income (W-2 wages) and the total is less than the $166,000 noted above.

There are various other options for you. But all require you to define what you plan to do with this money, St. Onge said.

If you need help identifying your financial goals, consider hiring a financial planner.

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