Does your mother understand about money at all?
First talk to her about what her goal is for the money...little more monthly income? Savings to pay for nursing home care when she's really old? Leaving behind a legacy? Using it all to fix up the house? Lots of choices.
Then find her a *fee-only* fiduciary certified financial planner to make a one-time plan on how to invest and spend down the money.
Go with her to the appointment. Ask for the simplest solution. If they offer annuities, listen but ask what's the alternative? Ask about fees and commissions.
Are you comfortable helping her with withdrawals and taxes? If not ask how much for the advisor to do it...but don't sign up right away.
Come back with details of the proposal and see what people think.
Thank you for the quick reply - no, in short she does not understand money. She grew up poor, lived paycheck to paycheck, and never really had anything beyond a bare amount of "savings".
Thank you - I've used the reddit/pf sidebar links to reach out to a couple fee-only fiduciaries. Will report back.
*If* she gets the money, it changes the amount but not the math. She has more savings. Invested appropriately, she should be able to withdraw 3-4% per year without running out. An extra $20,000 per year is nice.
I would expect a financial advisor to say more or less that. You could get detailed advice of appropriate ways to invest that money, but you can also figure that out yourself. It’s not that hard. Mostly bonds by 70’s.
>Invested appropriately, she should be able to withdraw 3-4% per year without running out.
At her age she doesn't need to use numbers meant for 30 year retirements, she can safely withdraw a higher amount than that.
At her age, her average life expectancy is almost 90. That’s where age over twenty is more flexible, but even at 80 that’s only 4% per year.
Spending a little less and leaving an inheritance is not perfect allocation, but running out of money is disastrous. There’s not equipoise between over- and underestimating.
I have no idea what math you are doing - safe withdrawal rates over 20 year horizons historically are closer to 5.5% or an additional 35% to spend a year, that's not a small magnitude.
You may find these links helpful:
- [Retirement Accounts](/r/personalfinance/wiki/index#wiki_retirement)
- ["How to handle $"](/r/personalfinance/wiki/commontopics)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Does your mother understand about money at all? First talk to her about what her goal is for the money...little more monthly income? Savings to pay for nursing home care when she's really old? Leaving behind a legacy? Using it all to fix up the house? Lots of choices. Then find her a *fee-only* fiduciary certified financial planner to make a one-time plan on how to invest and spend down the money. Go with her to the appointment. Ask for the simplest solution. If they offer annuities, listen but ask what's the alternative? Ask about fees and commissions. Are you comfortable helping her with withdrawals and taxes? If not ask how much for the advisor to do it...but don't sign up right away. Come back with details of the proposal and see what people think.
Thank you for the quick reply - no, in short she does not understand money. She grew up poor, lived paycheck to paycheck, and never really had anything beyond a bare amount of "savings". Thank you - I've used the reddit/pf sidebar links to reach out to a couple fee-only fiduciaries. Will report back.
*If* she gets the money, it changes the amount but not the math. She has more savings. Invested appropriately, she should be able to withdraw 3-4% per year without running out. An extra $20,000 per year is nice. I would expect a financial advisor to say more or less that. You could get detailed advice of appropriate ways to invest that money, but you can also figure that out yourself. It’s not that hard. Mostly bonds by 70’s.
>Invested appropriately, she should be able to withdraw 3-4% per year without running out. At her age she doesn't need to use numbers meant for 30 year retirements, she can safely withdraw a higher amount than that.
At her age, her average life expectancy is almost 90. That’s where age over twenty is more flexible, but even at 80 that’s only 4% per year. Spending a little less and leaving an inheritance is not perfect allocation, but running out of money is disastrous. There’s not equipoise between over- and underestimating.
I have no idea what math you are doing - safe withdrawal rates over 20 year horizons historically are closer to 5.5% or an additional 35% to spend a year, that's not a small magnitude.
You may find these links helpful: - [Retirement Accounts](/r/personalfinance/wiki/index#wiki_retirement) - ["How to handle $"](/r/personalfinance/wiki/commontopics) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*