Lowest risk, lowest fee IRA for pension plan roll over

[DBV1985]

Hello all,

I am trying to pick an IRA for my mom's pension plan roll over. It can be a Traditional IRA, or ROTH IRA. She has $14K to roll over and she is unemployed. She is also thinking about starting to receive social security benefits that are $450 a month. I am not sure what type of plan is best with lowest fees and lowest risk. Vanguard, fidelity comes to mind but not sure what type of IRA to pick? She is 64 yo.
Thank you!

J

[DBV1985]

I should also add the other options are for her to pick a monthly plan for $89/month or wait a year until she is 65 yo to receive $96/month. When a person passes away with this pension plan the rest of the funds that weren't used would go to a beneficiary. If the person passes away with the 14K funds used up then nothing would go to the beneficiary.

I think it makes most sense to roll over to IRA so that she can see some growth in the investment. However, I am afraid of the investment risk and uncertainty after the election. Is it possible to wait to invest the roll over until we decide the moment is right? Or are the funds going to get invested right away after we pick the account?

J

[seattlecyclone]

Vanguard is good. They have low fees and lots of investment options.

If you roll over to a Roth IRA, your mother will need to pay tax on the entire amount this year, and all the withdrawals will be tax-free. If you roll over to a traditional IRA, no tax is due this year, and she will owe tax on any amount she withdraws in the year she withdraws it.

If you wish to wait until after the election to put the rollover into the stock market, you could park it in a money market fund for a while. This is like a savings account: the money will earn some pitiful amount of interest, losing ground to inflation, but the number of dollars you have won't go down.