No. of Recommendations: 3
I'm newly married and found out that my wife's Roth IRA is invested in a money market fund making about 5%. …. but she trusts her Grandfather who made the initial investments. How do I convince her to be more aggressive???-


Congratulations on your wedding vows Frank. As you probably know, there is no such thing as an “approved solution” on how one should invest in their Roth IRA. It is normally based on a style of investment that is learned. Hence, your solution is to expose yourself and your wife to different investment styles until you find one that is comfortable.

Aggressiveness is all a matter of perspective, a money market account to some is an “aggressive” investment. Mutual funds and stocks are conservative options in the eyes of those at the gambling tables of Las Vegas. Education is the key to unleash your investment spirit.

Here is always a good place to start:

You can then focus more on lessons learned in Roth IRAs here: It's a nice chapter on Roth IRAs and what you can do with them.

Or you can show here some hard numbers (usually this is the one that gets people's attention to make some changes).

Let's say she is 25 years old and has $10,000 in her Roth IRA. Assume she continues to make regular $2,000 annual contributions until she turns 60. At this point, she reflects back on her successful investment strategy.

With her money market account, growing 5% annually, after 35 years of investing (compounding interest of course) she will have $244,833. If she were to invest in a market index fund that has averaged over the last 50 years about 13% (reinvested dividends of course), then she would have $1,956,184 toward her retirement. This is all tax-free since it is invested with a Roth Account. Let's see, $¼ Million or $2 Million…choices….choices….choices…

There are more aggressive strategies that may or may not get you a higher rate of return, but you may want to start off a little conservative until she is accustomed to additional risk.

Hope this helps,

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