Help with IRA

[Maya12]

Hi Need some guidance:

My Mom passed away unexpectedly - leaving me a 401K fund - it was converted to a IRA - 2k in stocks and 8K in cash with my bank. Now the broker is recommending to invest in 60/40 Mutual fund/Bonds? Any thoughts if this is a good idea. I will be working at least 16 more years.

Thanks,

[mongstradamus]

I would try to move into one of the low cost brokerage places like an vanguard, fidelity or Charles Schwab. I don't know what kind of fees your "advisor" may be getting. 

60/40 is probably fine. You can build your own with index funds for probably much cheaper then thru an advisor. 

[CreditDunce]

I am sorry for sorry for your unexpected loss. 

Mong* has given good advice.  I would certainly follow it.  If you would like more detailed information on how to go about it, you can check out the following books from your library:

The Bogleheads' guide to retirement planning by Larimore, Taylor, Call num: 332.02

The Bogleheads' guide to investing by Larimore, Taylor, Call num 332.6

There is also a Bogglehead website you can find really good advice on.

I think the first book has a chapter on the ins and out of dealing with an inherited IRA.  Be sure to consider when you need to start taking RMDs. 

[bada_bing]

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@mongstradamus wrote:

I would try to move into one of the low cost brokerage places like an vanguard, fidelity or Charles Schwab. I don't know what kind of fees your "advisor" may be getting. 

60/40 is probably fine. You can build your own with index funds for probably much cheaper then thru an advisor. 

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^^^This is good advice.

Sorry for your unexpected loss.

I'd add a comment that Schwab has a free rollover service that will handle moving the account for you. I've used it twice,

once for rolling over a previous job 401K and once to roll over an IRA of my dad's after he passed away.  Very low hassle.

I think Fidelity has a similar service available.

Also, the rules for an inherited IRA can be different from your own IRA. You may be subject to RMD's (required minimum distributions)

based on the birthdate of your mother, not on your age. It is helpful to have guidance from a company like Schwab or Fidelity that

has retirement accounts as a core part of their business. I personally wouldn't trust something like a local credit union to have the

best info on something like retirement account rules and regs. Schwab has an online calculator you can fill in the blanks, but I would

get the account set up with a brokerage and they will have the RMD's set up to keep you in compliance.

Beneficiary rmd calculator

[Maya12]

The current broker is Merrill Edge.

[mongstradamus]

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@Maya12 wrote:
The current broker is Merrill Edge.

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i believe with merril edge you can buy some low cost etfs to similute an 3 fund portfolio. You have that option if you don't want to open an whole new account somewhere else. I am not sure how much it is to buy additional shares though. 

[RonM21]

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@mongstradamus wrote:

I would try to move into one of the low cost brokerage places like an vanguard, fidelity or Charles Schwab. I don't know what kind of fees your "advisor" may be getting. 

60/40 is probably fine. You can build your own with index funds for probably much cheaper then thru an advisor. 

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I like this thought also. Sounds reasonable.

[Anonymous]

Vanguard ETFs. Make two purchases, one to buy into the total market index, VTI. One to buy into the bond fund, BLV. Choose to have dividends reinvested.

Make up your own mind on the bond vs stock split. The stronger your stomach, the higher the stock percentage.

Then forget about this account until you retire, it will take care of itself.

[Anonymous]

Sorry to hear the news.  I have both Merrill Edge and Charles Schwab accounts. Personally, I find Merrill Edge more confusing but it has good benefits if you have more than 50k in it such as 30 free trades a month.  However, I love Schwab customer service.  Both should work fine.  I would personally look at mututal fund with a good track record and some overseas diversification as well.  Even with 10k, you should be able to get in a couple of mutual funds with some overseas and domestic exposure.