UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: ckw Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76075  
Subject: Foolish Allocation Date: 1/7/1999 11:56 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0

Five years ago I inherited $250,000 when my father passed away. His accounts were at Merrill Lynch, and not knowing a thing about investing at the time, I decided to follow in Dad's footsteps and just leave the money there.

WRONG!!

The broker set me up in a Variable Annuity (VA), two IRA's (one for me and one for my wife), and several mutual funds.

After comparing my overall returns for the last five years with the S&P 500's (16.15%), I have discovered that my account lagged behind at about half that rate!! And now, after paying off some debt, the account balance now stands at about $275,000.

I am a Registered Fool as of this week, and things are going to to different BEGINNING NOW!

These are retirement funds, and I would like to retire in 10 years or when the account balance reaches $2,000,000 whichever comes first.

(Let's see....Using the Rule of 72 and a 20% annual compounded interest rate, the money should double every 3.6 years. So, starting with $275,000, if it doubles once--$550,000--twice--$1,100,000--thrice--$2,200,000. And, 3 X 3.6 = 10.8 years. Wow, we're in pretty good shape with the time and money! The only thing that remains is consistently getting the interest rate, and to a Fool that should be no problem, right?)

OK, this is what I need to know now:

1) What to do with the VA? Bite the bullet, pay the tax and penalties ($8000), and make it up with higher returns investing Foolishly? OR, do a 1035 exchange and transfer it to another Annuity with better subaccounts, i.e. mutual funds?

2) How would a Fool allocate this chunk of change among the various ways to Foolishly invest?

Your thoughts would be greatly appreciated.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Value Hounds

Netflix Riles Investors
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement