Ask Terry Questions Help investing inherited money

Help investing inherited money

By Terry Savage on April 27, 2013 | Investments

My dad left us 50,000 we want to invest it . We are max out this year in Roth. Because my wife is still working, I have a 457 with the city I cannot contribute to. We have some Ira with goldstone financial but rather go some where else. Would like to have individual advise me . Can you recommend a company or individual. Thanks a lot Terry really go by Your advise- I’m retired —

SAVAGE SAYS: I am sorry for your loss, but glad that you are being sensible about what to do with the money he left to you. You’re right — you don’t need to pay a financial advisor to make good use of this money. First, since you are maxed out in retirement savings for the year, you can now deal with this money as “after-tax” money — a definite plus for your planning. You won’t be required to take distributions from this account after ate 70-1/2, and you will only pay taxes on any future gains because of investment growth.

Now, without knowing anything else about your life, your financial situation and obligations, and your goals, it’s hard for me to be specific about what to do with this money. But what I’d suggest is contacting Vanguard, Fidelity, or T. Rowe Price — all no-load, no-commission mutual fund companies. They will work with you to decide on an investing strategy. Important:? if you don’t have any other liquid — easily available — savings, I’d keep at least $20,000 in a money market fund. It’s what I call “chicken money” — and it helps you sleep at night, knowing its there if you need it.

From the wording of your post, I’m betting you’re getting close to retirement. So you might put it ALL in a money market fundat first, and then gradually? — perhaps $5,000 per month — transfer $30,000 into an equity/income mutual fund, leaving the balance in the money fund. That will give a good conservative mix — and all three of the above companies have this kind of equity-income?fund.

Of course, if you’ve neglected to tell me about your debts, then hold on to half the money in a MM deposit account at the bank, and pay off higher rate debts immediately. Be conservative with this money, as you’re unlikely to see another windfall!



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