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No. of Recommendations: 1
My parents are in their 50's and have asked me to take a look at their finances to help them plan for retirement.

Their basic plan is to sell their house in suburban DC, move to Florida and pay cash for a smaller house with the equity from the DC house. Then live off my dad's military retirement and Social Security.

Having said that, they still have about 50k in assets mixed between Roth IRA's and 401k's. Their plan is to max out their 401k's once mom starts working again. So my decisions are:

1. Where to move their Roth IRA's. Right now they are w/Putnam Investments, which I think is charging them $20/quarter in maintenance fees (have to do a little more research on that). I need to get a little more guidance on what they want to do with their Roth's first, but I'm thinking Vanguard or something similar (with no maintenance fees).

2. The real question on my mind is what to do with their 401k $$. They were burnt by the tech bubble (as most people were), so they are leery of stocks, but I don't want to dump all their money in to a bond fund either. I'm thinking some sort of balanced fund (60/40 Stock/Bonds) or a good stock (index) fund and bond fund. One specific question I have is can you buy I-bonds from within a tax sheltered account (IRA)? One thing they have thought about (being from Nebraska originally) is putting it all in Berkshire Hathaway (BRK). Although I think BRK is a great stock, it's not very conducive to a tax sheltered account (no dividends, thus no tax liability until you sell). It also comes in pretty big chunks (even for B shares). Also Buffett/Munger are due to 'retire' soon. Personally, I think BRK will be fine, but the stock may take a hit at exactly the wrong time for my parents.

3. Another question I have has to do with health insurance. They get Champus though the military, but my question is if my dad dies first, will my mom still be covered? Also, I hear Champus still requires you to go to the VA for your prescriptions, etc. If that is the case, I'm assuming they should be looking to retire near a VA hospital or DOD installation with a base hospital. Again, what about my mom's meds?

Anyway, in a nut shell, those are the things I've thought of. Any suggestions would be greatly appreciated.


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