A client recently asked me about an inherited IRA that was sitting almost entirely in a money market fund. The returns were modest, and the client wondered whether it made sense to stay the course or shift toward something with more growth potential. It is a question that comes up often among Americans living in Israel who manage U.S. retirement accounts from abroad.
Safe does not always mean smart
Money market funds feel comfortable. They do not swing with the market, and the balance normally stays steady. But over time, modest returns may not keep up with inflation. A portfolio that looks stable on paper can lose purchasing power year after year. For someone who may not need the funds immediately, that slow erosion is a real cost, even if it never shows up as a loss on a statement.
A balanced approach can reduce the tension
In many cases, splitting an inherited IRA between equities along with some more conservative holdings like Treasury bonds offers a reasonable middle path. The stock portion provides long-term growth potential, while the bond portion adds stability. This kind of structure helps people stay invested without feeling overexposed. That said, there is no single formula. Each person’s comfort with short-term losses, timeline, and income needs should shape the decision.
Inherited portfolios deserve a fresh look
One of the most overlooked realities with inherited accounts is that the original allocation was chosen by someone else. It reflected a different person’s goals, age, and tolerance for volatility. Keeping that same structure by default is not a plan. It is inertia. Reviewing the portfolio and adjusting it to match current circumstances is not just reasonable. It is necessary.
For Americans in Israel, these decisions carry additional layers. Currency considerations, tax reporting obligations, and account access all factor in. Working with a financial professional who understands both sides of the equation can make a meaningful difference.
If you have inherited a U.S. retirement account and are unsure how to move forward, schedule a free introductory call or contact us at 02-624-2788.
Douglas Goldstein, CFP® is the director of Profile Investment Services, Ltd. www.Profile-Financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates provide tax or legal advice.
Published May 12, 2026.