Tradional IRA
I am 65 yrs old, I had a 401k which I have transferred to a Traditional IRA. Currently it is sitting at Wells Fargo waiting for me to put somewhere. My 401k was at Wells Fargo so I thought it would be easier to just put it in a Wells Fargo IRA but now I’m not sure I did the right thing. I’m at an age where I’m hesitant to invest in the stock market. The market is at a high and CD and annuities are low. Where would be a safe place to invest.
Terry Says
Well, you’re not alone in facing that situation. You don’t want to take risk, but the interest rates on CDs and other “safe” investments are artificially low. And a bank isn’t necessarily set up to provide great alternatives. I’d love for you to read The Savage Truth on Money to understand why you need some stock market exposure — over the long run — and your life expectancy is at least 20years. So your real risk is that leaving all the money in the bank will expose it to the ravages of inflation.
I would leave the money inside the IRA in a money market deposit account for now. You can do only one rollover every 12 months. Be very aware of that rule because it could cost you a lot. A bank is not set up to offer you a variety of low cost investments — no matter what they tell you! So wait a year, and then do another IRA rollover to Fidelity or Vanguard. Put at least one-third into an equity-income fund, and by then rates on money markets should be a bit higher. Then write back for more specific advice.
