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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: Need Help With the Parent's IRA! Date: 9/2/2003 3:26 PM
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Am I missing something?

Did I miss the part in your post where your parents were asking for your help?

Your parents are bringing in good incomes so I would assume that they are not complete idiots and are capable of learning what they need to know about retirement planning. Unless they are about to do something questionable and irrevocable like buying an annuity then you should probably back off and let them manage their own affairs.

What you can do it to help the start reading up on retirement planning and investing. For example you could refer them to information about how important it is to manage their costs.

As to your questions;

1) Stock mix.
Since they are still working and assuming that are saving a lot of their current income then it makes sense to have a higher than typical percentage of their portfolio in stocks. They may choose not to retire until their mid sixties or later so they may have over a decade of work before them. In the retirement planning they should probably plan on at least one of them living into their mid nineties. That is a long time to do depend on a portfolio that is light in stocks.

2) Broker.
Individual investing is not for everyone even with mutual funds. As long as there aren't hidden fees, the deal they have is surprisingly cheap if they have a good broker. If the broker is just buying mutual funds for them that have and additional expense of a couple of percent a year, or even worst, a load, then that that would be a bad deal. You mentioned several numbers but the value of the portfolio at the peak is misleading because what you really need to know is how the portfolio is doing compared to if it had been invested in an index fund instead.

3) Roth IRA conversion
The answer is simple, ask a tax accountant. There are so many factors in play that it would be worth paying for a professional opinion. At your parents level of income and assets they should being having their taxes professionally done anyway.

Bonus question
...he will soon have access too when he is 59 1/2.

If he wanted to he could get access to it now without a penalty, using the substantially equal withdrawal option.

Greg

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