Greetings,
My MIL is recently widowed and because her husband took care of all the retirement/financial issues, she is at a loss as to how to manage her investment accounts. I'll give as much detail as I can and I greatly appreciate any recommendations on how I can best help her. We are already looking for a financial planner. The cheapest one I contacted wants $2000 to develop a comprehensive investment plan. I'm only contacting fee-only, fiduciaries. Until we actually select one I thought I would seek advice here. Thank you in advance for taking the time to look this over.
Here is her situation:
I think that's everything. Doing what simple calculations I can, it looks like she's in fine shape (i.e., she's not going to run out of money anytime soon). I have used Firecalc but wasn't sure how to set some of the options.
She's not interested in taking a lot of risk and she's not trying to "grow" her money (other than to beat inflation). What she wants to know is if her money is in the right places to accomplish these goals:
Here are the specific questions I will be taking to a financial planner.
I just re-read the above and see that this post is long. My apologies. I'll end it by saying thank you for reading this far, and a big thank you to anyone willing to offer an opinion her situation!
Griff
My MIL is recently widowed and because her husband took care of all the retirement/financial issues, she is at a loss as to how to manage her investment accounts. I'll give as much detail as I can and I greatly appreciate any recommendations on how I can best help her. We are already looking for a financial planner. The cheapest one I contacted wants $2000 to develop a comprehensive investment plan. I'm only contacting fee-only, fiduciaries. Until we actually select one I thought I would seek advice here. Thank you in advance for taking the time to look this over.
Here is her situation:
- 73 years old
- SS is $1685/mo
- Spending is under $3000/mo but we've only been tracking that for a few months using Mint. She says she has been frugal since becoming widowed, so spending may increase if she has the means to do so.
- Owes $70,000 on home (worth $270,000) at 3.5% interest. Mortgage payment with taxes is approximately $900, which is included in the $3000 figure above.
- New car - paid in full
- No other debt. Uses CC but pays in full each month
- Asset-1: $217,000 in a Lincoln fixed-rate annuity earning 4.8% until April 2016 then drops to a minimum of 3%. No surrender fee after April 2016
- Asset-2: $73,000 in a different Lincoln annuity earning minimum of 3%. Current surrender fee is 6%. Fee will reduce 1%/year. In 2018 she will have a 30-day window of no surrender fees, then a 7-year "rolling" surrender charge will reinitiate. Also, both Lincoln annuities allow up to 10% fee-free withdrawals per year.
- Asset-3: $27,000 in a Schwab IRA (I know nothing about this one yet other than the amount).
- Asset-4: $6,000 in a Roth IRA
- Asset-5: $15,000 in a Sunamerica Trust IRA, 80% Mutual Funds and 20% Cash (that's what I was told; haven't personally checked into this one either)
- Asset-6: $270,000 in savings from husband's life insurance policies.
- Also has about $7,000 in checking and maybe $50,000 in gold coins
I think that's everything. Doing what simple calculations I can, it looks like she's in fine shape (i.e., she's not going to run out of money anytime soon). I have used Firecalc but wasn't sure how to set some of the options.
She's not interested in taking a lot of risk and she's not trying to "grow" her money (other than to beat inflation). What she wants to know is if her money is in the right places to accomplish these goals:
- Consume as little of the principle as possible
- Have something to leave to her 3 children
- Occasionally spend extra on a vacation with family (she's used to spending about $3000-$5000 on cruise vacations).
Here are the specific questions I will be taking to a financial planner.
- Should she keep her money in the annuities where she's guaranteed a safe 3% return?
- How should she invest the $270,000 from life insurance? What should the allocation look like? How much should be kept as cash for emergencies?
- Should she pay of her mortgage?
- What is an appropriate income to accomplish those goals (if possible)?
I just re-read the above and see that this post is long. My apologies. I'll end it by saying thank you for reading this far, and a big thank you to anyone willing to offer an opinion her situation!
Griff