Where to invest the money for my parents?

Investing Forum
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Hey guys, my parents, who are in their mid-40s, asked me to help them invest their money, but I’m clueless about where to start. They max out their 401(k) each year, and I’m not sure if they should also consider a Roth IRA. They have $300K to invest and already have an HYSA with a year’s worth of emergency funds and no debt. I feel overwhelmed, and I want to ensure that their hard-earned savings are managed well. We’re currently using Fidelity, but if you have strong recommendations for Schwab or Vanguard, please let me know. Also, their income is over $90K, and they have negligible monthly expenses. Any advice on where to allocate this cash or how to approach this would be greatly appreciated.

1 Like
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Hey,pals
Think about the tax ramifications of various investing choices.
Investing in a variety of asset classes can help reduce risk. best advice is
you should consider speaking to a financial expert if you’re unclear about your investing decisions.

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Given their age and financial situation, a Roth IRA could be a great option to consider.

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If they’re retired, let the professionals handle the distribution. Use one of the funds for retirement income, such as IRTR, VTINX, FIKFX, and others.

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Hi John,

It’s great that your parents have a solid investment foundation. Here are steps and options for managing their $300K:

1. Assess Risk Tolerance and Goals

  • Risk Tolerance: Understand their comfort with risk.
  • Goals: Define short-term and long-term objectives (e.g., retirement, travel).

2. Consider Tax-Advantaged Accounts

  • Roth IRA: Contribute up to $6,500 per person ($7,500 if 50+). Verify eligibility or use a backdoor Roth IRA.
  • Health Savings Account (HSA): For tax-free medical expense savings if eligible.

3. Investment Accounts

  • Brokerage Accounts: Invest in:
    • Index Funds/ETFs: Diversified and low-cost.
    • Dividend Stocks: Regular income.
  • Mutual Funds: Actively managed or target-date funds.

4. Diversification

  • Asset Allocation: Spread investments across asset classes.
  • Geographic Diversification: Include global investments.

5. Consult Professionals

  • Financial Advisor: For personalized advice.
  • Tax Advisor: To optimize tax efficiency.

6. Investment Platforms

  • Fidelity, Schwab, Vanguard: For various investment options and support.

Action Steps

  1. Review Existing Accounts: Maximize 401(k) and retirement accounts.
  2. Open a Roth IRA: If eligible.
  3. Allocate Funds: Based on risk and goals.
  4. Consult Professionals: For tailored advice.

Your proactive approach is commendable. These steps should help guide their investments effectively.