May 12, 1997

Q. I am retired at age 60, and have moved my $12,000 IRA from Fidelity Magellan to Vanguard, with $3,000 in its Index 500 fund and the rest being moved into that fund over the course of five years. My wife prefers her IRA to remain in Fidelity Cash Reserves. Are we making sound moves?

J.V., San Diego

A. The missing element here is timing. If you expect to leave these funds alone for at least five years, both of you are being a bit too cautious for my taste.

In your situation, I would shorten the dollar-cost-averaging program to three years. In your wife's case -- unless she's uncomfortable with any risk -- I'd counsel something a bit bolder. At the more cautious end, she might step up to Fidelity's GNMA fund, which over the long haul should deliver roughly 1.5 percentage points more return than the money markets.

If she's comfortable with a little more risk, why not try to interest her in Fidelity Asset Manager? I know it had a horrible time a couple of years ago, but management has been changed and it's now a much more conservative fund.

However, I wouldn't make any of these moves if you think you're likely to call upon the funds within five years.