How should I invest my only retirement savings?


Q. I’ve never invested on my own. As part of my divorce, I get half my husband’s 401(k). But how do I know what it should be invested in? This is my only retirement money and I don’t want to mess it up.
— Newbie

A. We’re glad you’re asking and taking this seriously.

How your retirement money should be invested depends on several factors.

Those include your age, how close to retirement you are, your current income, your ability to handle the risk of market downturns and if you’re able to save more for retirement, said Debra Ohstrom, a chartered financial analyst and financial educator.

She said there are a few paths you can take to answer these questions.

“You can go to a certified financial planner (CFP) who can help you analyze your situation, your risk tolerance and put a plan into place for your financial goals,” Ohstrom said. “The fees for a financial plan can range depending on the planner and time they would need to spend with you.”

Or, she said, you can go to a financial advisor who will manage the investments for you for a fee — some include planning as well. That fee can range from 1% to 1.5% and additional fees may be added depending on the underlying investments the advisor chooses for you, she said.

“Another possibility is an automated investment account like Wealthfront or Betterment,” she said. “They do charge fees but it is usually less than 1% and you can speak to someone on the phone that will ask you questions in regards to setting you up in an account with the best investments for you and your situation.”

You can also take some educational courses so you can learn the basics of investing and not have to blindly trust anyone, Ohstrom said.

“Even if you choose to have someone do it for you, it can be helpful that you are educated on investing so your meetings with a planner or advisor are more productive and you can be an active participant in your financial future,” she said.

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This story was originally published on May 6, 2022 presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.