MW I will inherit my parents' $1.5 million estate. Do I fire the adviser who charges a 3% fee?
By Quentin Fottrell
'Some stocks have risen, but others have flopped'
"I have $720,000 in retirement accounts and $590,000 in an individual brokerage account." (Photo subject is a model.)
Dear Quentin,
I'm a 58-year-old single parent with two children. I have $720,000 in retirement accounts and $590,000 in an individual brokerage account. I also have $40,000 in a 503(c). I work for myself and my salary fluctuates between $80,000 and $170,000 a year. I never know how it's going to be, even though I've been making the higher end of it for the last few years.
I don't plan on retiring until after 70. My expenses are $100,000 a year. I also have an $80,000 mortgage on a $900,000 home. I will inherit my parents' $1 million home, plus $450,000 in a regular brokerage account. My parents' broker charges them a 3% fee and this broker does not achieve returns better than the S&P 500 SPX. Some stocks have risen, but others have flopped.
I have a few questions: Should I sell the home? Where should I put the money? Do I rent the home even though it's across the country? How difficult could it be dealing with renters that won't leave or potential fires and other disasters? I'm also unsure about what to do with the $450,000 in my parents' brokerage account.
Lost in Limbo
Don't miss: 'I plan to exit corporate life': I'm 50 and have $400,000. My wife is a teacher. Can I retire at 55?
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
The first thing you should do is remove the financial broker who is charging your parents 3% fee on a $450,000 account.
Dear Limbo,
When you are unsure what to do, do nothing.
That is an action and, during times of great stress or market volatility, an increase in gas prices and persistently high interest rates (It's high compared with the average over the last 15 years, but still not too high by historical standards). But the point is: This is enough to create fear (not a good reason to make financial decisions), confusion (another no-no when moving around large sums of money) or the need to sell in haste (definitely a disaster waiting to happen).
The first thing you should do is remove the financial broker charging your parents 3% fee on a $450,000 account. That is ridiculously high. Please advise your parents that this is an outrageous sum for less-than-stellar results, and it's not worth maintaining based on excuses and/or the promise that they will somehow beat the S&P 500 next year. If it's a mixture of high returns and big flops, he's cherry-picking stocks without due care.
Over 20 years, that 3% annual fee on a $450,000 portfolio, earning an average 7% market return before inflation, would leave your parents with $985,000. Without paying that fee, your parents' investment could grow to approximately $1.74 million. The fee shrinks the principal and your parents' returns earned on that principal, thereby eroding compounding (the returns you earn on the previous returns).
Give yourself a year and have an estate agent manage the house. You could be lucky and get good tenants. Alternatively, if it feels like too much work, clearing out the house upon your parents' deaths and getting the property up to scratch, follow your gut - and sell the property and invest the money in a low-cost index fund, passive investment vehicles that track market benchmarks, or an exchange-traded fund that tracks a specific index.
Related: 'I want safe returns': I'm 73 with $300,000 saved. I'm not interested in the stock market. What should I do?
Diversifying in your 50s
At 58, your portfolio should be diversified into stocks - with around 20% of non-U.S. stocks - bonds and cash/cash equivalents. At your age, 60% in stocks and the rest in bonds and 10% in cash/cash equivalents would be a relatively conservative stance. As you are comfortable investing in the stock market and you don't plan to retire until you're 70, you could probably hold more in stocks. You have a longer runway to retirement.
High-yield online savings accounts and certificates of deposit (CDs) are a low-risk option, assuming you sell the house and don't want the hassle of being an absentee landlord. You can still find high-yield online savings accounts and CDs with annual percentage yields (APYs) of over 4%. U.S. Treasurys currently have mixed reviews, given the uncertainty about the trajectory of Federal Reserve interest rates and ongoing geopolitical conflict.
The $30 trillion Treasury market is showing signs of strain, with soft demand at recent auctions pushing yields higher. (Yield ranges constantly fluctuate.) Meanwhile, the Iran conflict has driven oil prices up, surpassing $100 a barrel, sparking serious concerns about an economic downturn and a spike in the cost of living due to the rise of food and transportation costs. You may also benefit from investing in tax-free municipal bonds, as opposed to CDs or taxable U.S. Treasury.
Don't be afraid to stand up to brokers who are charging you 3% when 1% would be a more normal fee. You certainly don't need someone charging these kind of fees when you can put this $450,000 in a fund of the big investment houses (such as Charles Schwab $(SCHW)$, Fidelity and Vanguard). With your parents' inheritance, you will have a net worth of at least $2 million. With prudent, even conservative management, you could increase that to $3 million by 70.
In the meantime, enjoy time with your parents while you have them.
Related: I'm planning to retire at 60. Should I sell my house and invest the $500,000?
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-Quentin Fottrell
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April 25, 2026 10:28 ET (14:28 GMT)
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