New Investor

[Guest TrueTopper]

I am 53 yrs old....I want to invest for 10 years...I have been told that the Roth IRA is the way to go for me.

Need opinions....I already have retirement thru my job, 401K, and 403B....this investment will be money coming in that I did not expect......what are your suggestions....which funds?....don't slam me...I am a rookie at this.

[GBurns]

I can't think of why a Roth or any IRA would be even applicable to this lump sum that you are expecting.

Is this money taxable? Do you need to shelter or defer the taxes?

There are a number of questions that should be asked and answered before you make a decision. But I do not think that here is the place. IMHO you need a few advisors/sales reps/consultants (whatever you want to call them) who represent a large number of choices. Get their input then make your choice.

It is not possible to advise you which funds or funds that you should use without knowing something about you, your finances, your risk tolerance, your targets etc etc. Anyone who pushes any particular fund or fund family without analyzing your facts and circumstances, should be regarded with suspicion.

[John G]

This site is not about "slaming". The moderators (I am one) have done a good job of making sure this site did not devolve into a Yahoo like message board.

Normally you would want an advisor to know you before making suggestions. In this format, that means a lot of questions... the history of this site has shown that assumptions about authors are often wrong.

Here are my questions: (1) Are you married or single? If married, do you file a joint return? (2) You said "I already have retirement through my job" - do you mean your expected retirement needs are likely to be completely met by those plans? If so, what is your goal for these additional savings? (3) Do you expect to have earned income during the ten years? (4) What is your investment knowledge and attitude towards risk? (5) What investment vehicles are being used for the retirement plans. (6) Do you feel that you have sufficient cash reserves for emergencies? Any high interest debt issues, like credit cards? (7) Current and future expected tax bracket or rough income range? and (8) Are there any special circumstances (health, college tuitions, weddings, etc.) that should be considered.

Roth basics: Before anyone can suggest a Roth, they need to know that you qualify. This is a combination of having earned income, the adjusted gross income that your report on your 1040, and your tax filing status. Note, that a Roth can only shelter a modest amount each year ($4000 per individual, plus $4000 per spouse, plus $500 "make up" amount for those over the age of 50). So, you might be able to shelter $9,000 now and another $10,000 in January if you are married and qualify. If your additional income is a large lump or beyond this annual range, you should be considering a taxable investment account.

Types of investments: The range is huge. This is where your experience level, where your current retirement assets are placed, your investment goals, and attitude towards risk are factors. You did not indicate when you might want to use these funds.... such as to boost your income in retirement, later in retirement, any specific goal (a sailboat, world tour, etc.), or just building your estate. For lots of folks, mutual funds make sense because you get a diversified investment and they require only a modest amount of tracking and record keeping. Since there are over 8,000 mutual funds - chosing one or two can seem bewildering. I generally recommend that folks choose from the universe of NO LOAD funds (no front end fees) that have modest annual expenses. Many investors choose index funds because of their ultra low expenses, low turnover, broad coverage and because they are willing to accept performance that mimics the stock market. Well, there are now hundreds of index funds.... and not all are great choices.

Ultimately, in investing (Roth or otherwise) you are the key person. It is not wise to delegate the decision to others. No one faces the same motivations that you do - its your money. You make want to go the active advisor route, but that siphons off some of your performance. I believe that normal folks, if they are willing to spend a modest amount of time reading about investing and their choices, can take charge of their own investment decisions.

Post again, and I will try to give you some pointers.