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Fidelity Rollover IRA and John Handcock GPA Choice Annuity

E

essasin

Platinum Member
My Mom and I where preparing our tax info and we got to talking about her Fidelity Rollover IRA and John Handcock GPA Choice Annuity. Unfortunatly she stopped putting money into her IRA account because of reasons I did not ask. I'm 25 and setup a Vanguard Target Retirement Fund that I have been maxing out every year. Its not much but it is a start. Back to the point.

All her holdings are in Mutal Funds (Fidelty Freedom 2010 FFFCX). She has as of today about 97k and gained about 4.54% from last year. I noticed that Fidelity Cash Resevers has a 7-day yield of 4.98% and it maybe something worth looking into. Are there any options she should be looking into?

She also has GPA Choice Annuity which she has about 27k and is only getting about a 3% return on.

Are there any other options worth looking at?
 
If she's almost at retirement she has to be a lot more conservative than younger investors, so I can't just suggest moving money into S&P 500 and international index funds -- those did over 10% and 20% last year but she'll need more dependable income every year.

Those would both be good additions to what she already has though. i.e. keep her existing balances and start making new contributions to those funds.

Has she stopped making any new IRA/401k contributions? If so, she's in trouble because $130K is way too small for a retirement nest egg.

Unless she enjoys cat food, and not even the fancy wet kind, she needs to cut back on her spending and start saving again.
 
Fidelty Freedom 2010 (FFFCX) returned 9.5% in 2006 and 5.9% in 2005 according to Morningstar. Where did this 4.54% come from? (FFFCX) may be appropriate for someone retiring within 5-10 years but $130K isn't. Generally, annuities aren't good for most people except for the person selling them.

You may wish to register ($5) at Morningstar.com and ask your question on the Vanguard Diehards forum. The regulars there can provide a lot more useful advice. But you'll need to ask your mom for additional information.

BTW, good to hear that at 25, you've already set up a Vanguard Target Retirement account!
 
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