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Question after reading Bogleheads Guide to Investing

Bogleheads • View forum - Investing - Help with Personal Investments - www.bogleheads.org
Hello All,

Just finished reading Bogleheads Guide to Investing and I really enjoyed it. I had a few questions about the book and my specific situation.

First about the book, in one chapter it talks about hypothetical portfolios. For a young investor it lays out a portfolio which is 80% total stock index and 20% total bond index. If this hypothetical portfolio were set up, would there only be two total things in it? The total stock and bond indexes?

Secondly, my specific situation. My father recently passed and along with some cash I've inherited part of his traditional IRA. I knew enough when I got it that I shouldn't be paying for actively managed things, but also knew I didn't have a clue what to do with it (hence reading the guide to investing). Now I've got a question. At first my plan was to set it up as if someone between my age (30) and my fathers age (60) were the actual holder of the account. This way it would have slightly less risk, a feeling I have just because it's money from my father and I'd be pretty upset if went down the tubes. When I looked at the holdings, it was all different stock funds (no bonds, this was a mistake right? Seems risky). I've started balancing it a bit to reflect a middle-age investor as the guide to investing recommends. However, someone recently suggested an idea and I'm looking for additional opinions. They suggested calculating what the required RMDs would be and to put enough money into a high dividend yielding mutual fund to reap close to the amount needed for the RMD. Then just move that a money market account and do whatever with it (my plan is to split it into my own IRA and the rest in a brokerage account/savings/spending as needed). What are thoughts on this approach?

Additionally, I was a little confused about how to differentiate between funds for the IRA (his or mine) and other options for a normal brokerage account. He left enough cash for me to open an IRA and fully fund it for this year (I have a pension plan I've contributed to through work currently but don't have an additional IRA), as well as have enough left over to start a brokerage account. What kind of things should be in the advantaged Roth IRA vs in the normal brokerage account? Thanks for all the help.
Date: Jun 19, 2017   


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