Got some $ I have to roll out of my ksop into a retirement account. Looking for a conservative place to put it with a decent return. Any suggestions? Traditional IRA or maybe a Roth? Thanks.

roth IRA contributions are made after tax.

txaggieacct85 said:

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roth IRA contributions are made after tax.

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depending on the type of plan you have with your employer rolling a roth IRA can have tax consequences.

Na Zdrav 87 said:

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Got some $ I have to roll out of my ksop into a retirement account. Looking for a conservative place to put it with a decent return. Any suggestions? Traditional IRA or maybe a Roth? Thanks.

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Not sure what you mean by conservative or a decent return. Are you willing to have the capital at risk or not?

No. Don't need to risk the principal. Didn't think about that with the Roth.

Na Zdrav 87 said:

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No. Don't need to risk the principal. Didn't think about that with the Roth.

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I think you're mixing up concepts. You need to decide on a traditional IRA or a roth IRA and understand the tax implications of rolling to a Roth IRA. If your existing plan is tax deferred, you likely want to avoid a roth.

Decide that first.

Then you can decide what you want to invest in within the IRA or Roth IRA

Na Zdrav 87 said:

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No. Don't need to risk the principal. Didn't think about that with the Roth.

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A few thoughts:

If you truly want to have no risk to the principal, your options are pretty limited. You're looking at an IRA with either CDs, Money Market Funds, annuities, or Treasury securities.

If you're willing to take some minimal/moderate risk, you can consider highly rated bonds, utility stocks or ETFs, high-quality preferred stock funds, etc.

If you can handle more risk to seek out greater return, the world of equities is open to you, probably starting with blue chip type stocks.

In any case, I'd suggest being blended between the above categories. If this is your primary future source of retirement income, I'd consider being on the conservative end, and if you have other retirement funds, and this is simply supplemental to that, take on more risk if you feel comfortable with it.

Thanks. That clears it up!

IBonds are at 4.3% at the moment. Pretty safe. Of course you can at least get close to that in a high yield savings account too.

If you feel risky, you can try your hand at one of these high monthly dividend stocks. Due diligence required of course.

TSLY
SLVO
APLY
OARK

Some big name monthly dividend providers include Carl Icahn's IEP. A short seller knocked the price down lately making its yield really high.

JEPI is a board favorite. Big name at almost 11% right now.

Someone here recently mentioned GOF which is yielding around 13%.

Do a Roth IRA with Vanguard or Fidelity and pick a Target Retirement Date Fund.

How appreciated is the company stock? If significantly above your average basis, a Net Unrealized Appreciation (NUA) distribution could present an interesting tax arbitrage opportunity. This would necessitate the company shares landing in taxable account though.

If you're rolling from a company plan you will have to roll it to an IRA. Once it's there you can move it to a Roth but you'll pay tax on the conversion. What you invest in is up to you but I would take very little stock in the rec's up above. My rec would be an index fund or keep your company stock if you think it's good.

OldArmyCT said:

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If you're rolling from a company plan you will have to roll it to an IRA. Once it's there you can move it to a Roth but you'll pay tax on the conversion. What you invest in is up to you but I would take very little stock in the rec's up above. My rec would be an index fund or keep your company stock if you think it's good.

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Just a thought on company stock: Employees are already highly dependent on the performance of their employer, for salary, benefits, and future equity-linked awards. Therefore, it's USUALLY a good idea to methodically liquidate any company stock you receive, and reinvest elsewhere. It's just prudent financial diversification, nothing against anyone's current employer.

Thanks for the replies.
You are exactly right IBleed maroon!
I am having to roll out of privately held company stock. It's at its highest point ever. I would liquidate it all but my plan option won't let me. I have a feeling it will go down with next years appraisal with this economy and interest rates.
Oh well. I'm taking all I can now.