>I'm receiving 1.4% on my 401K funds in cash reserves and 0.9% for normal/accessible savings in a corporate money market fund
James, two things:
First, you should not consider your 401k to be your "cash reserves", since 401k withdrawals are heavily penalized. (Assuming you're younger than 59-1/2.) Sure, you can borrow against a 401k, but that option goes out the door when you lose your job.
Second, investing 401k funds too conservatively is a good way to go broke during your retirement. The balance between stocks and bonds/interest-bearing accounts should be somewhere between 50-50 and 80-20, depending on how close you are to retirement. Over the long haul, stocks have always outperformed bonds and interest-bearing account. The S&P has doubled over the past five years, although that's hardly typical. If you had put just half your money in stocks, you would show a respectable 10 percent annual return rather than less than 2 percent.
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