Q&A: What to do with an old IRA?

Dear Liz: I left a job several years ago to become a full-time freelancer. I have a SEP IRA and a SIMPLE IRA from that job that have basically just been sitting there. What are my options in moving this money to a better retirement investment?

Answer: SEPs and SIMPLEs are just the tax-advantaged buckets into which you (and your then-employer) put money. It’s the investments you choose within those buckets that determine what kind of returns you’ll get. The financial institution that’s holding these accounts can be a factor as well: If it’s charging a lot of fees, your returns will suffer accordingly.

Your best bet is to make sure the accounts are being held at a low-cost provider and that you have sufficient exposure to stocks to offer growth that will offset inflation over time. Most discount brokerages and mutual fund companies offer target-date maturity funds that give you diversification, professional asset allocation and automatic rebalancing at a low cost.

Related Posts

  • Q&A: How to fund a Roth IRA Dear Liz: I have quite a bit invested in stocks in a regular brokerage account. I've held them for many years, and to sell them would mean […]
  • Q&A: Social Security Payouts Dear Liz: My wife and I, 63 and 62, plan to continue working till at least 65. We will begin collecting Social Security benefits in […]
  • Q&A: Keeping investments in one brokerage Dear Liz: I recently retired at 56 and am receiving a pension. My wife is set to retire next year at 56 and will also receive a pension. I […]
  • Q&A: An Update Dear Liz: I think you were way too hard on the young man who said his 30-year-old girlfriend's lack of retirement savings was a potential […]