T. Rowe Price Personal Investor - 4 Reasons to Save in a Money Market Fund (2024)

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¹Money market mutual funds, although not covered by the FDIC’s federal deposit insurance, tend to provide slightly higher yields than bank savings accounts and CDs over time. Banks may provide money market savings accounts, which are different from money market mutual funds.

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Important Information

All investments are subject to market risk, including possible loss of principal.

Retail Money Market Funds: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. T. Rowe Price Associates, Inc. is not required to reimburse the Fund for losses, and you should not expect that T. Rowe Price Associates, Inc. will provide financial support to the Fund at any time, including during periods of market stress.

Government Money Market Funds: You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. T. Rowe Price Associates, Inc. is not required to reimburse the Fund for losses, and you should not expect that T. Rowe Price Associates, Inc. will provide financial support to the Fund at any time, including during periods of market stress.

This material is provided for general and educational purposes only and is not intended to provide legal, tax, or investment advice. This material does not provide recommendations concerning investments, investment strategies, or account types; it is not individualized to the needs of any specific investor and is not intended to suggest that any particular investment action is appropriate for you, nor is it intended to serve as the primary basis for investment decision-making. Any tax-related discussion contained in this material, including any attachments/links, is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any tax penalties or (ii) promoting, marketing, or recommending to any other party any transaction or matter addressed herein. Please consult your independent legal counsel and/or tax professional regarding any legal or tax issues raised in this material.

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202404-3519601

FAQs

What is the 4% rule T. Rowe Price? ›

Rowe Price suggests the 4% guideline as a starting point for a withdrawal strategy. This means that in the first year of retirement, you could consider a withdrawal amount that is 4% of your retirement account balance. Every year, reassess the following to adjust your withdrawal amount if needed: Your spending needs.

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What are the advantages of MMF? ›

Money market funds invest in highly liquid securities like cash, cash equivalents, and high-rated debt-based securities. Because they only invest in highly rated securities, money market funds offer a high degree of safety. Money market funds also offer investors higher yields than traditional savings accounts.

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What are the benefits of investing in a money market fund? ›

Low Risk and Short Duration

As stated above, money market funds are often considered less risky than their stock and bond counterparts. That's because these types of funds typically invest in low-risk vehicles such as certificates of deposit (CDs), Treasury bills (T-Bills), and short-term commercial paper.

How much is SWVXX paying? ›

SWVXX

Description	Average Annual Returns (%)
Description	1 Year	3 Year
SWVXX	+5.25	+2.62

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Can I retire at 62 with $400,000 in 401k? ›

While retiring on $400,000 is possible, you may need to adjust your lifestyle expectations if this is your final retirement amount. If you want to retire early, $400,000 might be a difficult number to make stretch.

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What is the 4 rule in investing? ›

The 4% rule aims to minimize the risk of failure (running out of money) by being very conservative with spending early in retirement. However, this comes at the cost of potentially underutilizing one's savings and not being able to spend more if investment returns are favorable.

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What are two disadvantages of a money market fund? ›

Key takeaways

Advantages of money market accounts often include high yields, liquidity and federal insurance for your funds. ...
Disadvantages of money market accounts may include hefty minimum balance requirements and monthly fees — and you might be able to find better yields with other deposit accounts.

More items...

Mar 26, 2024

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What are the disadvantages of MMF? ›

In addition to these risks, there is also the possibility of credit risk. Money market funds invest in debt securities issued by various entities, such as corporations and governments. If one of these issuers defaults on its debt, it could have a negative impact on the fund's overall performance.

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What is the risk of MMF? ›

Because they invest in fixed income securities, money market funds and ultra-short duration funds are subject to three main risks: interest rate risk, liquidity risk and credit risk.

Should I put all my money in a money market fund? ›

But generally, yes, it is worth having. Money market accounts offer a low-risk environment with a higher interest rate to grow your money. Money market accounts are insured by the FDIC and can help individuals reach their short-term savings goals.

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Is a money market account worth it? ›

Because you earn higher interest rates than with a traditional savings account, a money market account can be a great choice to set aside some emergency cash or start building your savings. And unlike a traditional savings account, you have more options for withdrawing your money when you want it.

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Which money market fund is best? ›

5 best money market mutual funds by yield

Symbol	Fund Name	Yield
AGQXX	U.S. Government Money Market Fund	4.68%
VYFXX	Vanguard New York Municipal Money Market Fund	3.57%
LTFXX	Western Asset Select Tax Free Reserves	3.36%
USEXX	Victory Tax Exempt Money Market Fund	3.36%

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May 31, 2024

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How often does SWVXX pay out interest? ›

Dividend Distribution Analysis

	SWVXX	Category High
Dividend Distribution Frequency	Monthly	Monthly

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What is the 7 day yield on SWVXX today? ›

Key Data

Label	Value
Total Net Assets	N/A
7 Day Yield	5.1476
Gross Seven Day Yield	N/A
Min Initial Subscription	N/A

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What is the average fee for money market funds? ›

The annual expense ratios for our money market funds range from 0.09%–0.16%, or $9–$16 for every $10,000 invested.

What are the 4% rules for investment? ›

One frequently used rule of thumb for retirement spending is known as the 4% rule. It's relatively simple: You add up all of your investments, and withdraw 4% of that total during your first year of retirement. In subsequent years, you adjust the dollar amount you withdraw to account for inflation.

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What is the 4 drawdown rule? ›

The 4% rule says people should withdraw 4% of their retirement funds in the first year after retiring and take that dollar amount, adjusted for inflation, every year after. The rule seeks to establish a steady and safe income stream that will meet a retiree's current and future financial needs.

How long will money last using the 4% rule? ›

This rule is based on research finding that if you invested at least 50% of your money in stocks and the rest in bonds, you'd have a strong likelihood of being able to withdraw an inflation-adjusted 4% of your nest egg every year for 30 years (and possibly longer, depending on your investment return over that time).

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How does 4% rule work fire? ›

Say an investor has retired with a $1 million portfolio. In her first year of retirement, under the 4% rule, she should withdraw 4% of that portfolio, or $40,000 ($1 million x 0.04). For each subsequent year, she should adjust the withdrawal amount for inflation.

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