I need help on money matters

[JeanFri2]

I'm 74 and have already retired, however I did not have a retirement income. I live on s/s only. when my husbank died the insurance money I received and I invested it in Merrell lynch that was 10 yrs ago, all I have left now is a IRA that is 17,148.10. My sister died last year and I received 100,000 she was not married . My question is what can I do with this to make sure I will have enough to last till my death, right now I have some in C D'S and was thinking of Money Market. can anyone out there be of some help to me and advise me what I should do
Thank you
JeanFri2

[obgyn65]

Hello JeanFri2 - do you have heirs ? If you don't, you may wish to consider annuities.

[JeanFri2]

Yes, I have 4 grown and Married children

[JOHNNIE36]

Quote:

Originally Posted by obgyn65 Hello JeanFri2 - do you have heirs ? If you don't, you may wish to consider annuities.

You may consider annuties regardless of your heirs. You are limited in resources with $117,000 available for investment. You have to invest in something safe. No gambling with these resources. Remember, you are #1. Take care of yourself first. I certainly cannot advise you as I'm no longer an investor. I'm the same age and cannot take chances with our funds. You have to find someone you can trust. Right now it's slim pickins' on safe investing (like CD's) but you will sleep good at night. I know others will chime in here, so wait around and see what some of our pros come up with.

[packrat44]

While I personally have a dislike for annuities, I think they a good choice for you. However, since interest rates are so low, I would hold off or at least go in gradually over the course of several years. I firmly believe we will be seeing an increase in interest rates and if you can hold off, you should get better terms. Mean while, place the money in very short term bonds or CDs.

[4merKPer]

How much do you need to live on and how much is your social security? That will give you (and us) an idea of what your $117,000 needs to provide you.

[obgyn65]

Johnnie36 is right. My comment was assuming - perhaps wrongly - that the OP wanted to leave something to her heirs.

Quote:

Originally Posted by JOHNNIE36 You may consider annuties regardless of your heirs.

[JeanFri2]

My Monthly expenses is 1000.00 and my s/s is 1346.00 I have a 2nd mortage on my home, the 1000 a month encludes everything taxes,insurance,utilities,charge cards etc. I remarried and my husband is supposed to give me 500.00 a month tward expenses but I can't count on that, I'm lucky if I get 200.00 or 300.00 everything is in my name. We have seperate accounts.

[Brat]

First make a will that states what will happen to your home and remaining assets should you predecease your husband. Evidently your husband is not a good money manager. Should you become unable to manage your affairs do you want him to have control over your savings? If not a power of attorney to another would be appropriate.

One advantage of an annuity (I think Vanguard would be the place I would shop) is that you won't outlive it. It is quite possible that you will live another 20 years so inflation protection would be smart.

Another option would be to buy a stock with a history of consistent, increasing, dividends. On that list for consideration I would put General Electric, 3M and the Realty Income (symbol "O"). Based on 8/5/11 stock closing prices GE is paying 3.63%, MMM 2.66%, O 5.79%.

[Hobo]

A lot of what you do is dependent on your attitude toward your family and leaving money to your heirs or flaky ex?-husband. I am 65 and have already given everything to my 2 kids and ex-wives that they can expect from the head of the family. Everybody in my family is on a path towards prosperity - thanks to what I paid for, the loans/gifts I gave them, and the knowledge I imparted to them.

Now my money is my money and I am going to live the rest of my life comfortably. It sounds like you have a home as an asset as well.

If I were you I would look into a program called a FHA's reverse mortgage program which enables you to withdraw some of the equity in your home. This takes the money locked, hidden in your house and gives it to you every month as extra income.

You should go see a stock broker ... maybe one of your friends knows one she is happy with. Sit down and explain your situation plus what you are comfortable doing. He can find a annuity that is pays good dividends and is safe. Vanguard is always a reputable name.

One other issue you want to consider. That is one trip to the hospital with a serious illness can take all your money virtually overnight because Medicare never pays all the bills. If possible, you should be putting all this $100,000 into something so that the money looks like it isn't yours. For example, you can put the money in the name of a responsible member of your family. You will still get the interest checks but through your family member. You want to look as poor as a church mouse if a collection agency ever comes knocking at your door.

[Brat]

Oh, dear, I can't describe how many ways I disagree with Hobo's advise.

Jean should educate herself on her investment options, see an attorney who specializes in elder law. A financial advisor, stock broker or not, will collect fees that she can avoid with knowledge. Nothing against those professions, they must make their money somehow, but I am afraid she will not be well served.

With respect to Medicare health insurance there are medigap policies but right now, unless she can increase her income, she may not be able to afford one.

What worries me are her potential financial responsibilities should her husband need care. Sometimes it is wiser to 'live in sin' when you are elderly.

[REWahoo]

Quote:

Originally Posted by Brat Oh, dear, I can't describe how many ways I disagree with Hobo's advise.

Yep.

You can get all sorts advice on the intertubes, some good and some not quite so much...

[oldtrig]

If I could answer that question I would be rich. I would just sit on the money until interest rates go up. There is no safe place to park money right now other than maybe U.S. Treasuries.
U.S. Government Bonds, Treasury & Municipal Bond Yields - Bloomberg

[GregLee]

Quote:

Originally Posted by oldtrig I would just sit on the money until interest rates go up.

That would be my first thought, too. More specifically, keep it in CDs, for the time being. However, if you do investigate annuities, at least make a comparison between how much income an annuity would get you and how much interest you'd get from CDs. After all, there would not be much sense spending all your capital on annuities unless they really do get you more income than the CDs.

I think it's a little soon to worry about Medicaid taking all your savings to pay for a nursing home. You're only 74! That's only 5 years older than me, and it's 13 years younger than my mother was when she became an invalid.

[JeanFri2]

I do have a will, everthing I have will be divided to my 4 children. they received nothing till the time of my death. However I do not have a power of Attorney, just don't trust my children enought for that. they do not like my husband. I also have a marrage contract. my husband has no sayso about my checking account are any money I have gotten. I like the Idea of anniuties,( would that be a fixed annuity say for 10 or less yrs.) I don't know anything aabout buying stock but I also like that Idea Can I buy on my own or need a brocker. what is realty symbol 0? I do appreciate all the input I'm receiving . When you go to the bank they want you money, same with the finicial brocker
thank you

[Brat]

The symbol that you read as zero is the letter O.

You can purchase stocks through a discount broker such as Fidelity (there are others but I like them because they have offices in the cities I frequent). Their fees are modest. You can price annuities on the Vanguard website, if I were in the market for an annuity that is where I would shop. In either case you would need to open an account with the brokerage house with enough cash for what you want to buy plus whatever they charge to process the transaction. Opening an account will involve paperwork, there is where you also can state a "pay on death".

You can buy insured (bank) CDs through Fidelity. I haven't done that but I have seen them on their website.

[Hobo]

So your still married. I thought your might be divorced since you said your husband pays you money per month (like alimony).

And your kids are no help either.

The trouble with CDs is they pay almost nothing - you are lucky if you get 2.5% per year. I am sure you are paying more than that on your second mortgage. If that's true, logically you should pay off your second mortgage and not have to make that payment every month.

I will say it again. If I were you, I would be systematically drawing down your capital on a monthly basis. That means a reverse mortgage on your house which would certainly put at least $500 in you pocket each month. Also take out the $200 interest plus an additional $200 per month from that $100,000 (for a total of $400 each month). You could live until you are 100 years old and still have money left for your kids (not much!).

That extra $900 per month should really make an improvement in your lifestyle.

But that is my style and may not be yours. At least take the $200 per month interest from your CDs. Your house and $100,000 will go to your kids when you move to the great beyond.

[Mtxu]

I would also recommend a reverse mortgage if you have enough equity in your home. At 74, you are qualified. The 3 conditions of a RM is that you live in the house, pay your property taxes and insurance, and maintain the home. The benefit for you is that with a RM, you don't have a monthly mortgage payment. You will be required to pay off all liens on the home (not credit card debt) and so by paying off the two loans on your home, all that money you used to pay to the banks every month stays in your pocket. That alone should help you breathe better. Since your 4 kids are married, they should be able to take care of themselves. The only thing is that if you predecease your husband, he will have to find a way to refinance your loan in order to continue living there. Depending on how much you are eligible for, you can either do a Line of Credit or get the guaranteed monthly draw option, which works like an annuity, for as long as you live in your home.

I have no suggestions for your cash.

I would strongly recommend that you look into buying a Long Term Care policy. If you can't trust your kids to manage your funds, and your husband doesn't help much financially, you don't want to be dependent upon any of them in case you become disabled and quickly get shuffled into a nursing home. A LTC policy, together with a reverse mortgage, will help you stay at home as long as you choose to.

A power of attorney and advanced medical directive are also two critical documents that you need to get right away.

[73ss454]

Quote:

Originally Posted by Mtxu I would also I would strongly recommend that you look into buying a Long Term Care policy.

Why would the OP need LTC ins? Since she is living on SS and doesn't seem to have much money I'd let the state take care of me if I were her.

She has 100k to live off of, how does she make the payments on the LTC?

[GregLee]

Quote:

Originally Posted by Mtxu The 3 conditions of a RM is that you live in the house, pay your property taxes and insurance, and maintain the home.

And if at some time in the future you fail these conditions, you could be out on the street.