Financial Planning for Generation X & Y Women
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Expert Q&A Archive

Are there different Roth funds/types of accounts you can go into with different risk levels?
If you roll over into a Roth IRA, are there different Roth funds/types of accounts you can go into with different risk levels?
Rachel Lane, CFP:
expert info »
Within a Roth IRA, you may hold various types of investments ranging from low risk to high risk. Your investment options depend on where the Roth IRA is held (i.e., at a mutual fund company, where you are limited to those mutual funds, or an independent brokerage firm, where options can be virtually unlimited). I hope this helps!
Gary Silverman, CFP®:
expert info »
A Roth IRA or even a Traditional IRA is a type of account, not an investment. You buy or sell the investments inside the account. If you go to a bank, likely they have a product that combines a Roth account and a CD, so it looks like one thing, but it is really a Roth IRA account into which you buy a CD.

Every bank, mutual fund company, insurance company, and broker can open a Roth account for you. It is then dependent on what they have available that determines the selection of investments you have to work with.

What is nice is that you can be as conservative as you want or as aggressive as you want. Depending on where you open your Roth IRA, you can buy a CD, Asian Stocks, a US Treasury Bond or bond fund, a Global Balanced mutual fund, Proctor and Gamble stock, or just about anything else.
Wendy Weiss, Ph.D.:
expert info »
When you move any money into an IRA, whether Roth or Traditional, you should make sure the money is market IRA--so that the government recognizes that the account is not taxed while the investments are growing.

When you put your money into an IRA, whether Roth or Traditional, you can select a greater variety of investments than you can in a Company Retirement Plan.

In fact, a Roth IRA and a Traditional IRA are generally opened at a brokerage--whether On-Line brokerage or traditional. So you can select stocks, bonds or any other types of investments available through those institutions. The RISK level varies. You should answer a questionnaire that tells you the level of risk that you will tolerate. Then you either select a mutual fund geared to that level of risk--say a moderate allocation and use it, or select a set of mutual funds or a mix of stocks and bonds that matches the allocation for your risk tolerance.
Christina Gears:
expert info »
There are a huge number of mutual funds and individual stocks that you can invest in. It all depends on your risk tolerance.
Gail V. Marquet:
expert info »
A good financial advisor would be the best person to consult on which investment options would offer the best risk advantages for your individual situation.

Certain limitations apply.

Always consult an investment professional before making an investment decision. Your investment professional will ask you questions about your risk tolerance and advise you as to the products which best suit your circumstances.

[Editor’s Note: For a side-by-side comparison of the Traditional IRA and the Roth IRA, see the chapter entitled “Becoming an Investor” in the Wi$eUp curriculum. Also included in that chapter is a “Pyramid of Investment Risk,” which shows low-risk, medium-risk, and high-risk categories of investments. Another source of helpful information is the publication Building Wealth by the Federal Reserve Bank of Dallas. The third chapter—entitled “Save and Invest”-- covers, among other things, understanding the risk-expected return relationship, the different types of investments, and individual retirement accounts. The publication can be found at]
Michael A. Masiello:
expert info »
Most investment options are available in a Roth, from the ultra safe to the aggressive. Usually if you have a long term horizon more aggressive is worth looking into. Good Luck, Mike.