IRA
1. I have a Roth IRA with Schwab as follows:
$6,600.75 Cash
$3565.28 in Schwab MarketTrack Balanced Portfolio SWBGXNo Load No Fee
Moderate Allocation. Does not look fund has performed well.
2. I also have $6,950.28 in cash in Rollover IRA with Schwab.
I am 62 soon to be 63 just beginning to put money away (have an additional $7,000 to put in). Schwab suggests I open a 401K (ridiculous – I am a small business sole proprietor) and to invest in Schwab Intelligent Fund (which I’ve read has not performed well). The cash has been sitting there for quite some time without being invested.
I’m thinking I should put all the money I can in the Roth IRA and contribute $6,500 and open a SEP IRA for additional funds but not clear what to invest in within the IRAs. Will probably be working forever or at least ’til 70-75 and would want income on top of SS if there is SS.
Suggestions? Sep IRA, Insurance, Annuities, etc.?
Permalink Submitted by Alan - IRA critic on Wed, 2016-02-10 16:18
It sounds like you should not be contributing to a Roth IRA unless you cannot deduct your TIRA contribution, as you will have very low RMDs in retirement and basically just SS income in addition unless there is other income you did not mention. Therefore, the main question is what do you expect your net income from self employment to average over the coming years? If it is modest and you need most of that income to cover expenses, a SEP IRA would be best. However, if your SE income is larger and you can afford to contribute more, then a solo K works better since you can contribute more to it, As for recent investments, in the last year or so very few funds have performed well. In the long term you should not be holding that much cash, but in the last year it hasn’t hurt you because you have not missed out on any gains.