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My father is 56 -- obviously nearing retirement. My parents don't know too much about investing, unfortunately. My dad has a significant chunk of change in his traditional IRA ($650,000.00) that he will soon have access too when he is 59 1/2. They don't have much savings outside of that IRA and they don't have a ROTH IRA. They do have $240,000 in their $320,000 house -- an $80,000 mortage.

My dad's traditional IRA is currently being managed by a broker at Wachovia. The only fees are as follows: the broker gets a simple 1% of the entire IRA each year. The idea being that he is motivated to make it grow so he gets a bigger annual chunk of the profits every year.

Before this bearish market hit a couple years back, their IRA had reached close to one million. Unwisely, almost all of their savings were in stocks. That pile of dough dropped to $400,000 in the worst part of these past three years, but it is on the rebound, and all the cash is still in stocks ($650,000)

My questions are as follows:

1. It is obviously very risky and unwise to keep all this dough in the stocks when they are so close to retirement, but they felt forced into doing so to "gain back" all the $$ they previously had. Since things are turning around, should they continue to keep all that money in stocks and "take it out" when it gets back up to a million. $800,000? Should they split it up -- keeping some in stocks, some in bonds, some in a money market, some in a low cost mututal fund?

2. Is their current broker situation the best they can have? They have little knowledge on investing and feel they have to have someone "taking care" of it. Should they instead put it in a low cost Vanguard fund that seeks to grow and preserve their money?

3. Lastly, my father and mother make a combined $150,000 annually. Could they save money converting this traditional IRA into a Roth IRA before they retire? Or will it be the same either way. Could my dad stop working now, get into a lower tax bracket, and say thousands on converting it to a ROTH?

Please put in your two cents. Thanks.
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