---""Personally, I dont think it is smart financial planning to have your entire life savings in your retirement account." Why not?"" I'd like to clarify the above response. The only exception that I can think of is an emergency account.--- Assuming you are funding your retirement account appropriately to provide adequate retirement income, why would you put additional savings into retirement accounts? Once there, you can't use them easily and without penalty until you are retirement age. No, tax savings from tax-deferred accounts are not inconsequential, but neither is the freedom that comes with having money available to use how when for what you want. I am putting money into a combination of 401k and Roth retirement accounts at a rate which will conservatively provide me with adequate retirement income. This is less than the max--(although well over employer-match). Every thing else goes into ordinary ol' non-tax-deferred investment accounts. It's not really "emergency" money--- i also have 6-month living expense emergency funds in my bank account. But I am in my 30s. Why would I put any money above and beyond what I will need for retirement somewhere that I can't easily reach it for the next 15-20 years? Maybe I'll want to go to grad school and want to use it for tuition. Maybe I'll get married and want to put my husband through school. Or my husband's kids. Maybe I'll want to buy a bigger more expensive house and want to use it for down payment. Or a second vacation and/or investment home. I might want to take a year off work and travel. I might want to take a year off work and be a mommy to a new baby. I might not *want* to take a year off work but be forced to when I'm fired from my current job and it takes me a year to find a new one. I might want start-up money for my own business. I might have a sudden desire for one of those convertible Mercedes two-seaters (is it the SL i think).... I might I might I might. Freedom (and security) is "why not?" (which are the same reasons btw that I'm saving it in the first place rather than simply spending everything above and beyond what I've decided I need to save for retirement)

Hello Zoey, Do you know whether the agency carrying on the business of your investments can sell only mutual funds, or do they sell stocks, as well ... i.e., are they a stocbroker? Are you aware that there are a number of mutual fund management companies that charge no purchase/sale fees (you buy their products directly from them)? As a Canadian, I am not familiar with the U.S. situation, but here in Canada a number of our large banks have an in-house stable of no-load funds - offered by their salaried staff. Quite often the no-load funds have as good a track record as the load ones. All mutual fund managers, in that they have expenses and like to be paid, charge a management fee regularly, called Management Expense Ratio (MER) lower for bond and dividend funds than for equity-based (i.e. shares of companies listed on stock exchanges) ones. U.S. based fund management companies charge lower rates than in Canada, as well. Very few mutual fund managers have a better track record than has been developed by the stock market as a whole, despite their claims to superior skills. Part of the reason being the annual fees that they charge, usually between 1 and 2%, which is a substantial portion of the approximately 8% developed by the market as a whole, averaged over time. As one poster mentioned above, some folks prefer to buy exchange-traded funds, rather similar to mutual funds, which simply buy a chunk of the market as a whole. Since there is little ongoing management involved, their fees are much lower. A person can also choose to buy certain portions of the market, e.g. oil and gas, minerals, gold, financials, retailers, transportation, utilities, etc. Or one can buy a portion of the markets in other countries, e.g. Europe, S. America, China, India. Do you have a major library nearby? You'll find a great deal of introductory material related to investing, plus information related to types of investments, and specific information related to individual issues. Many library staff are quite knowledgeable about those matters, and are willing to spend time with you to help explain some of them. I suggest that you start learning about some of the basics of investing, to begin. Also, perhaps make a list of a couple or three of the funds that you've received and ask how to research their track record. Do you have historic material relative to the recent history of the investments that you've received? Rather doubtful, as most executors of estates will just forward to you the investments that are to be given to you, without past records. I doubt whether any of the records from the former owners would be available: I'd be interested in some of them, to find what the relative values have been, over a period. Plus how often the broker had carried out transactions. Much of the reason to buy mutual funds is diversification, so that one need not make studies of, and frequent transactions depending on the action of various individual companies. Good wishes as you start out on this fascinating journey of exploration. Learning how money works is an interesting hobby - that pays well. Many are scared off, fearing that it's too complex for them to understand. But I say that it's a bit like Mom buying a loaf of bread, Junior comes in for supper, famished from all of that running around ... and stuffs a whole slice into his mouth at a time? He has alotoftroublechewing. But - if he takes it a bite ... plus a slice ... at a time ... he can get through a whole loaf in about a week. You have more than a week left of life, I hope! Good wishes to you and yours. ole joyful

You are confusing IRAs with 401k's and other plans that you (and maybe the company) contribute to. The 401k is held by a third party selected by the company you work for, and some are good and some are bad. You can invest IRA and Roth-IRA money in a plain savings account at your bank (where interest rates are currently about .01% as in one tenth of one percent), or stocks, bonds, funds, even some real estate. The important thing is that the money is given special tax treatment, so any retirement account should be discussed with a CPA for tax consequences. We do not intend to withdraw from our retirement plans until my husband is no longer working and our income will be considerably less without his salary and just social security payments, so at that time we will be taxed less than we are today.

Thanks jose and steve for the confirmation and advice! I like the idea of VanGuard or Fidelity and will check out both more thoroughly. I actually have about 25 years to retirement and will be increasing my retirement savings each year. Would love to save 25% but my income is low and I'm already living rather frugally (not a shopper, no vacations, no credit card debt, 3 month emergency fund)! For the last 4 years I have been saving (IRA/Roth) just over 10% of my gross income. My income is low enough that I have qualified for the maximum Saver's Credit (which is why some savings is in an IRA and some in a Roth). In the next year I will be re-entering the regular world of work (after being self-employed for 15 years). And while I have earned a living and loved being self-employed I have decided to do this so that I have better health insurance plan and work for a company that offers a 401K with a company match. My total saved is about $10,000 and the split is actually about $4000 in a regular IRA and $6000 in a Roth IRA. My thoughts are that I should invest the $4000 IRA in something that is relatively stable and I should invest the $6000 Roth in something that offers the opportunity for a greater return (especially since there is no tax on Roth earnings at withdrawl once I retire). At this time I am not looking to convert the regular IRA into a Roth IRA. Knowing the split ... $4000 IRA and $6000 Roth what the best option for each?