My husband and I just received a large sum of money that we have to put into an IRA. I have no idea where to start. Who to trust. I'm not a very big risk taker. I've checked into Vanguard, the local bank, and an individual financial advisor. The advisor is a fee only. I've only had small investments in the past. This amount is over 400,000.00. Any advice would be appreciated. Thanks!

My husband and I just received a large sum of money that we have to put into an IRA. I have no idea where to start. Who to trust. I'm not a very big risk taker. I've checked into Vanguard, the local bank, and an individual financial advisor. The advisor is a fee only. I've only had small investments in the past. This amount is over 400,000.00. Any advice would be appreciated. Thanks!

My investments are at Vanguard and I trust Vanguard, but I know that I still need to be on top of a few things myself. Are you looking for a place to invest the money (e.g., Vanguard mutual funds) or for investment advice? I select my own (index) funds and asset allocation.

This page seems to apply to your situation:

Help With Your Rollover or Transfer
Moving $100,000 or more into a Vanguard IRA®? A Vanguard retirement advisor can help. Call 1-800-414-1742.

Your Vanguard retirement advisor is ready to help, whether you're moving money into a Vanguard IRA from an employer plan, another IRA, or multiple IRAs. Advisors are available Monday through Friday from 8 a.m. to 7 p.m., Eastern time.

Your advisor will:

Personally manage your transaction—including paperwork and communicating with other institutions—from start to finish.

Discuss your financial goals and analyze your current retirement investments, including any company stock or brokerage holdings.

Provide you with a personalized report detailing an appropriate investment strategy, including recommended asset allocations and specific investments.

Determine whether you could benefit from additional Vanguard financial services and introduce you to the appropriate Vanguard specialists.

https://flagship4.vanguard.com/VGApp/hnw/content/AccountServ/Advice/ATSAdviceRollOverAssetsContent.jsp

I have no experience with using Vanguard for investment advice.

Regards,
Prometheuss

Forget the advisor and the bank. They only want your money, plus they don't know anything more than what's in simple books that you can buy off the shelf. I use Vanguard for everything. Spread the money around among a few funds, which would depend on your age. Fees are low and returns are as good as anyone elses. Good luck.

"My husband and I just received a large sum of money that we have to put into an IRA."

Hi footballmom,

Just to ask a silly question since you didn't supply the answer... Are we to assume that the money came from a qualified plan and you are doing a rollover???

If not you are limited to $4000 each into your IRA, assuming you have that much in earned income.

Regards, Ken

hi footballmom,
what you do with the money depends on what you need it for and when. is this money that you need to invest for income now? or is it retirement money that will sit in the IRA for years?

vanguard is well respected. and should have plenty of options for both scenarios above.

best,
--tytthus

You don't give us a enough information. What is your age? Is this a rollover from a qualified plan (such as a 401k)?

If you are investing for the long run (minimum of 5 years), I have developed a sample allocation that allocates capital among various sectors in order to get good diversification and balance -- large cap, midcap, small cap, REIT's, long-term bonds, and international equities:
http://boards.fool.com/Message.asp?mid=22518881

It is purposely heavily weighted towards equities, because equities give you the best chance of keeping ahead of inflation and taxes over the long-run.

We are both 40. This is an ESOP program. Retirement funds only. Sorry that I didn't indicate that. I am just worried about trusting someone.
I have called Vanguard. So, you think I should forget the bank. Should we put all the money with Vanguard, or try another company too?
I really appreciate all the feedback here!

We are both 40. This is an ESOP program. Retirement funds only. Sorry that I didn't indicate that. I am just worried about trusting someone.

I have called Vanguard. So, you think I should forget the bank. Should we put all the money with Vanguard, or try another company too?

I really appreciate all the feedback here!

How did you feel about the information you got from Vanguard? Any red flags? Would you care to share what you were told with us?

Did you talk with a 'Vanguard retirement advisor' or a 'Vanguard Personal Financial Planning Service planner' or just with someone in customer service? It is not clear to me yet whether you want investment advice (i.e., a recommendation on how the invest the $400K) or something else.

Regards,
Prometheuss

I just wanted to know where to go for advice. I did print out the Vanguard options you posted earlier. I liked the Vanguard people. You get a free advisor when you invest over 250,000.00 with them. I feel pretty comfortable with them. I have been getting advice from everyone, and just didn't know where to start. I have read a lot over the last year about financial advisors and banks. There a good number of people that I worked with that are all getting this kind of lump sum payment, and they are all using financial advisors and banks. Kind of scary. Thank you for your advice. Actually the initial vanguard proposal for asset allocation looks pretty close to what you gave me.

The bank likely will try to sell you an equity index annuity-dump them if they do.

Vanguard will try to put you into their funds and do some boiler plate financial planning. Vanguard's fine but you will get squat for financial planning.

If the "fee-only" planner is registered with NAPFA www.NAPFA.org that would be an ideal situation. If he is not registered with NAPFA then drop him. Another option is the Garrett Planning Network. www.GarrettPlanning.com

Then of course you could invest 400K with advice from an internet message board.

Buz Livingston
NAPFA Registered Advisor
Garrett Planning Network Member

I just wanted to know where to go for advice. I did print out the Vanguard options you posted earlier. I liked the Vanguard people. You get a free advisor when you invest over 250,000.00 with them. I feel pretty comfortable with them. I have been getting advice from everyone, and just didn't know where to start. I have read a lot over the last year about financial advisors and banks. There a good number of people that I worked with that are all getting this kind of lump sum payment, and they are all using financial advisors and banks. Kind of scary. Thank you for your advice. Actually the initial vanguard proposal for asset allocation looks pretty close to what you gave me.

If you want opinions on the advice Vanguard gives you in terms of funds and asset allocation then feel free to post the gist of that advice here. It sounds as if you might be able to build up some trust with Vanguard. If I were in your situation I would probably go the same route.

Best of luck!

Regards,
Prometheuss

I just wanted to know where to go for advice.

What about here?? We're typically more than happy to answer specific questions.

First you need to pick an asset allocation that you're comfortable with. Balancing between large, mid, and small cap stocks. Value and Growth. Then maybe add some international and REIT allocation for diversification. Then consider throwing in some bonds (high yield? long term?) for some more diversification and guaranteed income.

What Vanguard gave you and what the poster linked above are good ways to start.

Then decide if you're interested in picking your own stocks or if you just want to put everything in funds. If it's funds, pick low cost, no load funds. Either index funds or managed funds with a good historical performance and low cost. If you want stocks, that another whole topic.

And ask away!

Thanks for all the help. Stocks scare me, I think I'll stick to the funds. Although I thought about a local stock here a few years ago, and of course I didn't buy it, and now it's tripled in value. Thanks again.

With that large amount of money Vanguard will give you advice on how to invest it for free. The cost to you will be their very low expense loads on their funds. I suggest you go to Vanguard, get their advice and invest as they suggest. If you do this you will do better than most investors. Then, if you wish, you can take your time and study this stuff yourself and decide if you agree with Vanguard. Vanguard is a not for profit investment company. It is owned by the shareholders.

Do not go to a bank, or individual investment advisor. They will be very nice to you but it is not worth the lower returns.

Do not go to a bank, or individual investment advisor. They will be very nice to you but it is not worth the lower returns.

Or stock broker, personal financial planner, or anyone else who charges you for advice. They're all theives, crooks, or frauds. You don't need to pay for investment advice, particularly since the advice you'll get isn't worth piss in the wind. Have you ever wondered why stock brokers drive expensive cars and live in expensive houses?

Footballmom,

Wow do you get a lot of advice on this site.

From one end of the spectrum - here is my financial planning site, through, vanguard is the ticket or buy a bunch of stuff that diversifies to the other end - you must do it yourself or lose money (lower returns)!

This site is very good for advice, but you have to be very specific about what you are seeking! Which when you are starting out is very difficult, but is possible

Banks are good if you want a stable/guranteed return no hassle and no fun. And they are bank people getting into the financial planning, like was posted earlier if they go for an annuity without finding out other information -run away!!!

A stock broker is going to recommend stocks and really is not a planning method. He wants you to buy and sell because it is his income.

Vanguard has some boiler plate advice and some question/brochures to help with some aspects, but they don't get into the whole picture.

My take:
Financial planners are good to help you focus on the target whatever that is, retirement, education, business needs. They will sit down and go through your entire situation, determine your risk and then help you focus on what you want to do with the money. With that goal in mind (if you have a reputable planner) you will get advice on vehicles and strategies that will help you see those dreams for that money. And you may even make better returns than you would on your own.

You can do this yourself. That is the purpose of these boards. It will take some work and you may end up having some fun doing it!!!! Careful.

It depends on you!

For a lot of people, having some one else manage thier money is just "wierd" but I think getting advice - even paying for advice is good. You take your car to some one, you may have a CPA do you taxes, you would get a lawyer, a doctor or other professions. And all of those folks you have to trust as well. So this is obviously not an overcomable obstacle. Just like you would have to trust some of us on these boards.....

Some of the things you need to consider (just to get started) are:

If the money is strictly for retirement----
Age and investment horizon,
Current standard of living and expected retirment standard of living, including long term care type of decisions,
Length of retirement,
Other retirement income sources, (and assets)
Risk Tolerance,
Tax status and the tax rate at withdrawl of the money and the returns expected.
Time committment for your to manage or fees you are willing to pay for professional management.
And if you can't spent it fast enough - how you are going to pass the remaining balance to your hiers and or charitable contributions.

There a good number of people that I worked with that are all getting this kind of lump sum payment, and they are all using financial advisors and banks.

_________________

If there are a good number of you, then maybe you could form an investment club. It sounds like you are all in the same boat, more or less and maybe have the same goals for the money.

Have one of the folks who has an advisor describe what they went through and why, as far as questions, advice. The same for one of the folks who went through a bank.

Run some of the ideas past the folks on the boards and who knows!!!!!!!

have every one