Sorry if this post seems really basic. We are pretty naive when it comes to investing and could use some advice. We currently max my husband's 401k and receive a generous match on top. The 401k is a target date fund made up of Fidelity indexes.
Now that we are out of student loan debt, we want to open 2 roth IRAs (one for him, and a spousal one for me since I'm a sahm). We make too much to qualify for the tax deduction for traditional IRAs. We would be maxing both starting this year. We would open his IRA using some money currently sitting in a Bank of Americal/Merrill Edge money market IRA (for some reason my husband opened one before we got married and the funds have just been sitting in it until now). I'm trying to remedy the situation by moving the funds to investments that will actually make money.
The financial adviser at Bank of America/Merrill Edge thinks that because we already have a moderately balanced, 401k lifecycle fund with about 40% bonds, it would be best to move the stagnant money market funds into 100% equities like a passive S&P 500 index to generate more returns. We are 28, have moderate risk tolerance, and plan on retiring around age 50 so this advice doesn't necessarily sound wrong (or right) to me.
So a few questions:
1. Is putting everything into a S&P index a good plan for us currently? I keep getting mixed messages about whether the S&P indexes are the best idea, or if there is a better way to go. I don't mind general volatility, and I'm not trying to get the max amount of return. I just want something with a good average return over an extended period.
2. The expense ratio quoted to us by the adviser on the Merrill Edge S&P index is .20. I know I've seen vanguard lower, but .20 doesn't seem terrible. Does anyone else here work with funds via Merrill Edge?
3. Regarding the spousal IRA - should we invest in the same funds for both IRAs or is there a benefit to mixing it up and picking different indexes?
Thanks!