Relatively new to investing, I have Fidelity mutual funds and have a couple questions

[honu]

Hi everyone,

I'm new to investing. I was irresponsible when I was younger and didn't get around to saving money/investing until recently. I am turning 42 next week and have mutual funds in Fidelity. I converted my IRA to a ROTH IRA - not much, just $10,000, last month. I know I will have to pay tax on that, it's going to be added to my income (which isn't much because I'm unemployed) but I do have the money to pay the taxes because I have have been quite frugal the past year.

My question is what should I invest the $10,000 in? I already have the Fidelity Contrafund in my IRA and purchased some Fidelity Freedom Fund 2035. Are there any other funds I should take a look at?

Thank you for any help on this, I know I'm late to investing but I'm trying my best to catch up

[jpg7n16]

In a money market fund. Very low interest rate, very high security of principal.

You are unemployed. You can't really take a ton of risk with that money right now.


Now once you find steady employment, you should then switch to a target date fund around 2040.

What is your plan to be able to retire in 2035?

[honu]

Thank you for your reply.

Do you mean a Fidelity Money Market Fund? I looked it up and it said a minimum investment of $25,000.

Sorry I wasn't clear with my original post. I only have $10,000 in the ROTH IRA, $3000 of that I bought Fidelity Freedom Fund 2035, so I still have $7,000 left.

Is there a specific reason why should I switch to a target date fund of 2040?

I'm not sure exactly what my plan is to retire in 2035, I know that I have to play catch up and it's making me anxious when I think about it.

[jpg7n16]

Thank you for your reply.

Do you mean a Fidelity Money Market Fund? I looked it up and it said a minimum investment of $25,000.

Nope. I meant any money market fund. If you don't meet the minimum for that one, there are hundreds out there.

Sorry I wasn't clear with my original post. I only have $10,000 in the ROTH IRA, $3000 of that I bought Fidelity Freedom Fund 2035, so I still have $7,000 left.

Is there a specific reason why should I switch to a target date fund of 2040?

Nope. Not really.

I was just thinking you hadn't made a selection yet, and since you're admittedly behind on savings, you may need to retire a bit later than previously expected.

I doubt there's much difference between the 2035 and 2040 funds. Either one would work - once you find steady employment.

I'm not sure exactly what my plan is to retire in 2035, I know that I have to play catch up and it's making me anxious when I think about it.

Well I'm not intending to make you anxious, just to make sure you have some sort of plan for saving up. It doesn't have to be a perfect plan, cause odds are you'll have to change your plan at some point anyways.

But it is something you need to think about eventually.