Don't know how long term care came into this conversation, for it has nothing to do with CD's. Anyone that is aging knows that long-term care is a no-brainer purchase, for it may be the only thing that still presents risk in the lives of those that are financially secure. And many people will use the coverage.....it will happen to most people that live long lives. Certificates of Depreciation are just that. The after-tax yield is less than inflation, and the money is tied up for a long time. No reason to buy them.ppeter said:
What would you suggest he do Illini if he has money he will need to use in 3 years? He said he will get 5.6%, which most likely means he actually will be just around inflation or possibly beat it after tax. This could make for an interesting financial planning quiz for you sir to see if they helped you separate the sales from the generally accepted reality of planning.
c/ds make sense for a lot of people. if you dont have any debt and you have no appetite for risk, a c/d is perfect. my only comment here was that locking up money for 3 years makes no sense given the current interest rate environment. i would leave it in a money market or a 60 or 90 day c/d...then buy longer term c/ds this summer. you may be able to get 6.25% on three year money in a few months.
InSpades said:
I doubt many financial advisors are going to put you into a CD, unless you are elderly.
As I earlier posted, I dont know your situation, nor am I here to give a LOCK prediction about interest rates during next three years.
However, I wanted you to realize that with a 5.6% return, your real return on this CD will be negative. Real inflation + taxes are greater than the 5.6% return.
If your only other planned alternative was to keep the mentioned funds in a passbook savings account at a lower rate, than you probably should take the 5.6% CD offer.
