LXEX55
Recycles dryer sheets
First off, let me state that I make a point of never giving financial advice. I simply don't know enough about investing, and I feel that there are those out there who are in a much better position to advise. This case is different, the person asking my advice is my older brother, whom I love dearly, and who I am afraid may be an easy target. Plus, he specifically asked me, so so I am not giving unsolicited advice. My brother recently retired at 65 from a blue collar job. His wife is also retired. They have no children. Their condo mortgage is paid off. Both know nothing about investing. They will soon be joining me in Florida where they own a paid off condo. With his pension, and their combined Social Security, they can easily cover their monthly cost of living such as food, homeowner fees, entertainment, cable, etc. What they cannot cover with this income is annual costs such as car insurance, life insurance, medical costs over medicaid, and any surpirse major expenses such as the need for a new car, etc. They have about $410,000 in an IRA with Fidelity (my sister in law's 401k). This money is currently parked in a no risk money market account until they can figure an investment strategy. My question is, how should they invest this $400,000+ in order to be able to meet the above mentioned annual costs (which should come to about $8,000 a year, not counting medical or the eventual need for a new car, etc) with the least risk and least maintenance possible. My advice would be to invest a portion in some stock funds, and perhaps a simple fixed annuity. My brother is being bombarded with calls from Edward R. Jones reps, people offering free steak dinners along with a "financial review", and similar offers. I don't want him to make a mistake or be taken advantage of He is an honest, straightforward man, who has always lived simply and frugally. I did suggest a fee only financial advisor and he was lukewarm on the idea. May I ask for suggestions as to how you would advise him to invest this money?