WWMMD? AKA, I'm Roth IRA illiterate

arj14 · June 2015

Don't mind me, I lurk here a lot... I rarely post because I am terribly un-MM (I think the way DH & I use our money would make most of you cringe!)

My situation here is, I have a Roth IRA that was rolled over from 401(k) I had about a year ago for a short period of time. It only has about $330 in it, and is with Fidelity. When I had the 401(k), I just invested it in the fund for my target retirement date. Since I rolled it over, it has been invested in nothing because a) I don't even know what buttons to press to do that, and even if I did b) I am very not investment savvy.

I know it would probably be in my best interest to see a financial planner, but I'm guessing they are pretty pricey and I don't know if they would work with funds that are so small. I'm just completely lost with this and don't even know where to start.

simplyelise · June 2015

I'm talking out of my depth right now, but I believe I've seen from others around here that you should be able to call fidelity and get help from them directly. They get some amount for servicing your account, so they have to talk to you.

As for what to invest it in, it looks like Fidelity has some great tools: https://www.fidelity.com/retirement-planning/learn-about-iras/ira-choosing-investments

Maybe see if putting it back in a target "freedom fund" or one of their asset management funds would be a good choice for you?

maple2 · June 2015

If you go to the bottom of the Fidelity website, you can find a tool to help you locate an "investor center" by zip code. If the technological/website uncertainty is a big stumbling block, then I would definitely suggest you use that tool to find a local branch and give them a call to see if they would meet with you in person or give you a phone consultation. I found the Fidelity representatives to be really helpful when it came to the nuts and bolts of getting our money where we wanted it.

Like pp mentioned, Fidelity has their own target retirement funds that you could use (Fidelity Freedom funds). They can be a nice option for people who don't have the time or interest in actively managing their investments because they change the investment strategy over time to make it match where you are in your life. The closer to retirement you get, the more conservative they become.

hoffse · June 2015

I'd stick with index funds if you are in your 20's and 30's. Those are mostly made up of stocks, but they track whatever the market is doing. That will get you started until you have time to learn more about it.

Fidelity has several index funds to choose from. H has one called the Spartan 500 index fund that tracks the S&P 500.

To invest, you simply follow these steps on your account:

1) Click on your Roth IRA account

2) Upper left corner has a button that says "trade."

3) Enter the code/symbol for the fund you want to buy. For example, the code for that S&P index fund I mentioned earlier is FUSEX

4) Under the Action button, it should say "buy"

5) Enter the amount of money you want to spend - I would invest the entire amount.

It's pretty straightforward once you do it.

If you want to research funds, Fidelity has a very easy-to-navigate research tool. Go to your home screen on Fidelity's website, and there will be a drop-down menu on the top of the screen under "Research." Click on "mutual funds" or "ETFs" (or anything else you want). Then you can filter by morningstar ratings, rate of return, etc. You'll be able to pick from many options, and you can get the code/symbol for whatever you want to invest in from there. Each fund has it's own snapshot of how well it's done over time compared to the market, any fees, etc Quite useful.

Don't be afraid to ask questions, and don't be afraid to learn how to do this! Your investment blend needs to change as you get older, and I think you should look at it at least once a year to see if you are happy with your current picks or if you need to change it up. Learning how to do this is empowering!

RosieC18 · June 2015

Does your work have an Employee Assistance Program (EAP)? They often have financial counseling/advisor services that I feel people often forget about. They aren't trying to sell you anything and won't have a minimum investment like many financial planners, and might be a good place to start. If you do decide to hire someone, make sure they are fee-based rather than commissioned - it will save you a lot of money on the long term.

brij2006 · June 2015

I would call someone at Fidelity and have them guide you. They have service professionals both through their 800# and locally that could help you know what to do with it.

jessica490 · June 2015

I would call them as well. I have my 401K with them and they are very helpful over the phone. They can make reccomendations for you. I do have a target date fund and I like it because I don't have to do anything else but set it and forget it.

smerka · June 2015

Call Fidelity and talk to someone. First you need to figure out if you have a Roth IRA or a Rollover IRA. They are different. If you go from a 401k to a Roth, you will pay income tax on the money. 401k to a rollover IRA means no taxation because a rollover IRA is tax differed like a 401k. If it is $330, I personally would take the tax hit now and put the money in a Roth IRA.

vlagrl29 · June 2015

FIdelity is great. I call them when I need help and they always give me guidance. Lately I've been having an end of year talk with them over phone about how my portfolio is doing and they let me know what I could be more vested in regards to how aggressive I want to be. I then research on my own and make my own trades when need be.

MommyLiberty5013 · June 2015

Also, don't be shy! We all had to start somewhere with MM. We don't bite. And, many people come here seeking help and advice. Don't let fear be a reason you don't get into a MM mindset.

arj14 · June 2015

Thank you very much for all the advice! I'm planning on calling Fidelity and the EAP next week to get rolling. I will probably have more questions for you all though!

WWMMD? AKA, I'm Roth IRA illiterate

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