Investment question/advice

Invest in that which allows you to sleep at night. That is the best investment,

 

I have the time and the expertise to manage my own account, but I really don't anymore. I just own one stock. All the rest is mostly ETFs. I do a lot of index ETFs that mirror certain markets like small cap international, international, large cap I just like the ETFs. Extremely low fees. I think maybe around .06%.

 

Agree. Annuities are convenient, but they are expensive. If you are able to manage money, you are almost always better off managing yourself than buying annuities.

 

If you make too much to contribute to your Roth IRA, you can still contribute by doing a "back-door contribution". You put the contribution in a Traditional IRA, then immediately roll it over to your Roth IRA. It's legal and easy to do.

 

I also do this every year... key points to this strategy:

• You can't have other pre-tax money sitting in a traditional IRA. If so, the conversion is pro-rated and partially taxable.
• You need to correctly report it on your taxes as a non-deductible contribution, so the converstion to Roth is a non-taxed event. I believe it's form 8606 that needs to be filed.

 

My advice is to just trust me with it.
I will PM you my Venmo

 

I'm 100% in agreement here. And "able to manage money" can be as simple as adding money to the account, clicking Buy, and selecting any broad market index fund.

OP - Annuities are very popular in the finance industry... and very profitable to the people that sell them due to their high fees/commissions. I've been almost exclusively an index fund investor for ~25 years, and will very confidently state that my average return is higher than that 8.2% compounded.

 

Benjamin Graham, who was Warren Buffett’s mentor, advised ordinary people to put their money into index funds.

 

Exactly.

 

Yes, I would generally recommend ETF index fund of mutual index fund.

 

Thanks, I'll have to look into that. Do you suggest a Schwab or similar?

 

The traditional IRA isn't income limited but it is limited on how much you can put in annually (I think it's around 7K). Was looking for something where I could put larger chunks of money in.

 

I have Schwab and like them, I think Fidelity is good. I know that Schwab has a very usable website and app that I like.

A decade ago I used a by the hour pro to look over my plan and it was good. Schwab did the same thing last year for free and I was still on a good path.

 

Do you have access to an employee sponsored 401K with a Roth Provision? If so, max that thing out and rollover to Roth incrementally within your current tax bracket. Be careful if you are a high income earner. It might be better to just leave it in the traditional. There are many factors to consider here

 

First of all, if you are being “pitched” you should run and run fast. A lot of these annuity type products that are pitched by salesmen are notoriously bad. They pay commissions to the salespersons that range from 5-10% of the money you sink into it. Then you are locked in and they have exorbitant fees.

With the limited information given it’s impossible to evaluate but chances are it is a bad deal. There are a few types of fixed annuities that can make sense, and you can find them on this website.

Immediate Annuities - Income Annuity Quote Calculator - ImmediateAnnuities.com

If a financial salesperson, insurance salesperson or broker is involved, please please run from this as fast as you can.

 

While I am sure he would have recommended them, he died before index funds were invented.

 

If that’s true, thank you for the correction. I was remembering that from a biography of him I listen to a decade ago. I’ll have to look into it. Thanks!

 

Really it depends upon your age and not to need money when things crap out. I had an index fund and Berkshire Hathaway for years and they served me very well. But I also had real estate and life insurance to tap. As I got older, I began to keep more in municipals, bonds and CD's. My goal was to never have to think about money which is a great goal as one ages. I don't make much anymore but don't care a bit.

 

John Bogle is the one credited with popularizing them. I think he rolled a couple out in the late 70’s. Jeremy Grantham, an otherwise active investor, tried rolling one out before that but it didn’t go anywhere.

Graham was credited with popularizing value investing, which Buffet adopted in his early years. However, in later years Buffet has been an advocate for the S&P 500 index fund for most individual investors.

 

This. It depends on the fees and what your overall risk portfolio looks like.