UnThreaded | Threaded | Whole Thread (28) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: CABob 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 75859  
Subject: Re: How to invest a Large Lump Sum Date: 12/20/2007 11:04 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
I assume this is a 401k or pension lump sum payout and is eligible for a roll over into an IRA. If so that is what I would recommend with all of the cash. Assuming you are 59.5 at the time of retirement you can immediately take money out for expenses as you need them so there is no need to separate 5 years of expenses and keep it in a separate account.
As to the lump sum investing vs. dollar cost averaging -- reasonable minds do differ on this subject. Mathematically it is better to invest it all at once, but, that doesn't do much for the person who invests it all to be immediately followed by a major drop in the market. For this reason I see nothing wrong with taking your time to get it invested into your desired asset allocation. You might start by putting it all into a money market fund and then monthly over 12 to 18 months move it in pieces to the desired allocations. And of course you might intentially leave some in the money market fund for your short term expenses.

Bob
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (28) | Ignore Thread Prev Thread | Prev | Next | Next Thread

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."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
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.
Post of the Day:
Value Hounds

Mobileye's Growth too Hot?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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