How can I better invest in my IRA?
I am 63 years old and have $260,000 in a traditional IRA. I am working a great job and making good money and can work as long as I want. How can I better invest in my IRA?
With that positive attitude, all the good fortune will come to your way.
First thing first, if your estimated 2018 AGI is below the threshold ($63k for Single, $189k for a couple), you can fund a Roth IRA, instead of the traditional IRA. Roth will become more valuable to you in the retirement. In the meantime, you may want to convert some of the traditional IRA to Roth. In order to do it right, it’s highly recommended to talk to a CFP®.
As for the investment, it really depends on your retirement date. If you’re close to be retired, say in a year, you may want to tone down the stocks in the current holdings. It sounds counterintuitive since you asked for growth, not adding more bonds. However, the most recent research has shown that the sequential return risk (SRR) can thwart a well planned retirement. SRR is defined as a back-to-back down market at the beginning of your retirement. A simple way to illustrate a hard point is if you lose 50% of your portfolio in the first year, you need a 100% return the next year to just make it whole. However, in this case, not only you lose 50% in the first year, but an additional 10% the following year, it will take you a long time to recover that kind of loss, if at all. Therefore, it’s worth to engage with a CFP® to devise a plan that starts conservatively but gradually adds more stocks for better growth and hedge an inflation. Sounds good?
Unfortunately, investing isn't a one size fits all strategy. I would recommend setting up an appointment with a Financial Planner who can assist you with your questions in greater detail.
You need to consider your: Risk Tolerance, Current Holdings, Time Horizon, and so on. You may also want to consider other assets and other Retirement Accounts (401ks/IRAs) to determine if you have a surplus or shortfall for your retirement.
Then you can think about "better ways to invest." You may find based off of your risk tolerance you are where you should be.