Short -Term Goals

Emergency Funds, Vacations, Cars and Other Goals

There are several angles to consider when approaching saving for short-term goals.  First, determine how much money you will need for your objective — vacation, car, house — so that you can develop a plan.

Second, when reviewing your portfolio, make sure it fits your complete investment "time horizon".  Your time horizon is the number of years you have to invest before you need to use the money and how many years you'll need that money to last. For different investment goals, we place time horizons into three overall categories: short-term (one to three years); intermediate-term (three to 10 years); and long-term (10 years or more).

Saving with low risk vehicles with moderate returns, such as money market accounts, offers you more liquidity. That's why these accounts are considered more suitable for meeting short-term savings goals, such as a car or a vacation. Retirement, college savings and nest eggs are more likely to fit into the long-term goals category. If you can ride out periods of volatility, you might consider allocating some of your investments to equities for the long run. Nevertheless, it's generally a good idea to use the most widely recognized strategy of managing risk — diversification — and invest in other asset classes as well. Please keep in mind, however, that diversification is no guarantee against losses.

We offer several products and solutions that can help you achieve your various goals, both long-term and short-term. For example, you want your son or daughter to have the best education possible, but you also know that tuition costs are on the rise. There are plans specifically geared toward college saving. Many of these solutions also offer tax savings.

As an example, if you are saving for a new home, you can take up to $10,000 from your IRA, without an early withdrawal excise tax for a first-time home purchase for you or your spouse or children, grandchildren, parents, or grandparents of you or your spouse.  You may need to consider income taxes, depending upon the type of IRA account you have.  Mutual funds and after-tax annuities are two other investment vehicles that can help you save for a house, or any other long-term goal.

Web seminars are best viewed using a high speed Internet connection (such as DSL, ISDN, or cable access). Macromedia Flash Player 6.0.79 or higher, or Macromedia Flash Player 7 or higher for Linux and Solaris is required.

© 2014 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017