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Fidelity also offers a comparable moneymarket fund.

If you invest in ordinary money-market funds, there are no tax advantages. However, currently you can also invest in municipal money-market funds [which hold mostly tax-free investments] that now earn almost 4%. Rates may not stay that high, but while they do, and if you are in a high tax bracket, you should consider this investment.

For example, Vanguard offers such a fund, the Vanguard Municipal Money Market Fund (VMSXX), with a $3,000 minimum. Fidelity offers a similar fund, the Municipal Money Market Fund (FTEXX), with no minimum and a similar yield.

A 4% yield on a municipal money-market bond fund is equivalent to more than 6% for someone in the 35% federal tax bracket.

If interest rates fall, you can liquidate the funds immediately and invest in a traditional money-market fund or other conservative investment such as Treasury bills or CDs.

independently manage their finances.

Takeaway

Two-thirds of American adults report not having a last will and testament. Estate planning professionals agree that, in most cases, having a simple will — including an I Love You Will — is much better than having no will at all.

In addition to providing for the distribution of assets on death, spouses use their I Love You Wills to name guardians for minor children and pets. They also name will executors (and sometimes digital executors to handle a will-maker’s digital accounts and assets) to settle their estates and account for the payment of estate expenses, including taxes.

Lock in good rates with CDs

Returns on CDs have increased dramatically since the beginning of 2022. Currently, you can find FDIC insured five-year CDs with interest rates of approximately 4.5%.

Hopefully, actions by the Federal Reserve will help curb inflation. If so, returns on traditional investments such as indexed equity funds and longer-term fixed income funds will improve.

So, for conservative investors who are concerned about preservation of capital, it is prudent to consider putting some of your investments in shorter-term options such as money-market funds, Treasury bills, Treasury notes and short-term CDs.

As inflation comes under control, you can consider using dollar-cost averaging from conservative investments into conservative equity mutual funds/ETFs.

Fortunately, there are now short-term investment alternatives that offer reasonable returns as well as capital protection.

© 2023 Elliott Raphaelson. Distributed by Tribune Content Agency, LLC.

Also, simple I Love You Wills can perform admirably when everything goes as expected.

However, in certain cases, implementing an I Love You Will can have unintended consequences or represent missed opportunities to start supporting a favorite cause at the first spouse’s death or protect a loved one — including in the event of incapacity.

So, if you and your spouse are getting ready to write your wills this season — whether it’s an I Love You Will or a plan design with a bit more complexity — be sure to be thoughtful and intentional, and select the plan that is going to love you back.

© 2023 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.