My question is short and sweet: What do I do with an extra $500,000 in my IRA? The money came from the recent sale of a stock. **See:**I’m afraid of ‘starving to death.’ Social Security stopped our checks due to a hacked bank account. I understand why you would wonder what to do with that $500,000.
That’s a large sum of money. Such a profit could really change the way you plan for your retirement, depending on how old you are, when you plan to retire — and how you ultimately invest or spend it. Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it.
I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. It’s also worth putting your $500,000 in context.
How much of your total investable portfolio does it represent? If you have $5 million invested elsewhere, the sale proceeds make up only 10% of your portfolio. If your total portfolio is $750,000, the decision what to do with this money is far more significant.
Diversification and tax planning go hand-in-hand. For example, investments that generate substantial ordinary income may be better to hold in a traditional IRA, while investments whose returns receive favorable capital-gains or dividend tax treatment may make more sense held in a taxable account. **_Do you have questions about retirement, Social Security, where to live or how to afford it at all? We want to hear from you.
Join the conversation in our Facebook community:_**_**Retire Better with MarketWatch**_**_._** I asked some experts to weigh in. You should not treat the $500,000 as “a standalone pile of money,” said James Mayo, a certified financial planner and principal of IronFjord Wealth Management. If you are near retirement, then you know that your entire portfolio, including those sale proceeds, shouldn’t be invested too aggressively.
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