Skip to main content
No. of Recommendations: 1
Wow a bunch of questions but let me go after them.


"Should I risk moving these IRA's, and into what kind of fund, so in 15 yrs. it can grow at a rate better than 6%?"

Please get straight the difference between credit risk, market risk, and inflation risk. Over more than 10 years, the stock market will outperform all other types of investments. If you leave your IRAs invested in CDs, inflation will keep you from realizing as much profit as you otherwise might. The FDIC makes credit risk very small, and you will never lose your money, but you won't gain much either.

"Have tried to discuss with Paine Webber & others"

Brokers are paid to sell load mutual funds. No-load funds are bought, not sold, and you have to take some initiative on your own. The lowest fees and over a long time best results come from Vanguard. Vanguard invented indexing and has the lowest expenses of all mutual funds. You haven't been reading up on the stock market for years and years and have a few things to learn about investments. Keep reading. And don't depend on the Wise. Their advice isn't bad in this case but you can do better. The funds in question have
risk, yes, but they are good ones. They have more market risk (prices can go up and down) but are diversified enough to not have a lot of credit risk and much less inflation risk than the CDs you are in.

"M Fool suggests an Index fund. Do those have risk?"

Yes, they have market risk, very little credit risk, and little inflation risk. You can get load index funds, but we prefer no-load (which means nobody gets a commission for selling it to you).

"You don't take risks with retirement money". Should I just leave it in the 2 Tradit.IRA's in the bank @6%?"

You cannot avoid all risk. Your IRAs in the bank are earning less than you could. Inflation risk can kill you. You need more growth to live well in retirement and you won't get it at 6%.

"Should I leave some of it in the IRA CD and move some into a Growth Index Fund? Which one? Vanguard?"

That's a good choice. Now is a good time to make a move like that because the market has had a big recent correction. Over the next 10-12 years the upside is much better than if you had made this move 3 months ago. You haven't invested in stocks or funds before, from the sound of things, and you will be more comfortable if you just move like one IRA CD and leave the other alone for awhile. As mentioned, Vanguard has the lowest costs.

"Should I give the money to a broker and let them put part into a Growth Fund, part in an Index and part in a Utilities Fund?"

You'll do better with Vanguard. If you did this, over 10-12 years you would, however, almost surely do better than leaving the money in a CD.

"Should I buy a Treasury Bill for $10,000?"

No way. That would pay at present a little better than 6% (very high for Treasury bills!) and have no credit risk, but you would not get stock market returns historically 10% annually.

"Should I consult a Cert.Finan.Planner rather than consulting brokers at Schwab, Amer.Express, Paine W.,
Oppenheimer?"

If you wish. There is enough information here at the Fool so you shouldn't have to. If you do, consult a fee-based planner, not one that is paid a commission for selling you things.

"Is it true you shouldn't risk your retirement money?"

As above, it depends on the type of risk. You are risking inflation in the CDs. There is no way to avoid all types of risk.

"Should I move the IRA CD's into a Bond Index Fund?"

You might do that with one of them later. Bonds will perform over time a little better than CDs, but the first thing you need is some stock market exposure. Call up Vanguard (I think it is 1-800-ON BOARD)and ask for a prospectus. Consider leaving one IRA alone for now and putting the other, or part of it in Vanguard S&P or Vanguard Growth Index. And come around here and read. And read the financial section of your daily newspaper. Good Luck! Chris
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.