Reader: I am 61 years old and just retired Feb. 1st. While I was working, I invested in a tax sheltered investment program which is similar to a 401(k). The choices within the program are all index funds: large cap, small cap, and international stocks, and 2 bond funds as well as several "lifecycle" funds, all of which have shown about the same return as their benchmark indexes. Was wondering if I should leave it where it is and let them manage it or should I roll it over into something else?

Also, I have inherited approx. $70,000. What do you suggest I do with it? Mutual Funds? I also have a traditional IRA. Any suggestions? Given my age, I want to be somewhat conservative but yet am willing to take a slight risk.

I am new at this and want to do it right.

funds-newsletter: First, I can't evaluate the satisfaction you may or may not have with your prior plan. Seems to me that esp. if you dont know a whole lot about investing, these funds are about as good as you will get elsewhere. Only if you are or become more knowledgeable about investing, do I think you should consider rolling the investment into a mutual fund co. that would give you more options. For example, some people like to invest in other categories that your plan doesnt offer such as mid-cap stocks, real estate funds, natural resource funds, or money market funds.

I would say you are still quite young enough to invest whatever is left from an inheritance in mutual funds. I do not recommend leaving a fairly large amt of money in CDs or money market accts unless you are very confident that you won't need to have a greater amount available than you currently have.

Exactly what type of investments would depend on how much money you want to put in stocks vs bonds vs cash. So, you should add up all the money you have in stocks in work retirement plan and your IRA and see what % of the total amt invested it represents. Do the same for bonds. (Note that if you have Lifecycle funds, you will need to find out what % is in stocks and bonds from the administrator or perhaps their web page.) These would be your current allocations. I would recommend for a person of your age, apparent small knowledge of investing, and a desire for only slight risk, that you might invest about 30% - 35% of the entire amt in all your investments in stocks, maybe 45% in bonds, and 20 - 25 in money markets/CDs.

The types of investments that are somewhat conservative would be in bonds, U.S. Treasury Bond funds, and Inflation Protected Bond funds, and in stocks, funds that invest in the S&P 500 index. All of these funds are usually available at the larger fund cos. such as Vanguard and T Rowe Price.