Answers and Guides from Top Financial Advisors

Take your time! Before you can properly invest your $60,000 of savings you need to fully understand your monthly expenses. Compare your monthly expenses to your monthly income which seems to be just social security. Now if your expenses exceeds your income, the difference is your monthly short-fall amount. I would take this amount and multiply it by 24 months and determine the amount of un-investable funds that should be maintained in a cash account. review annually and increase from the investment account.

Now deduct your amount of un-investable funds from the $60k to determine your available funds to become investable funds. Now you have to determine your risk appetite or risk tolerance before you can invest. I would expect it to be maybe a 50% stock and 50% income mix. This is critical to determine before you invest any dollars in any investment(s).

Also before you invest any money in any funds review the operating expenses or costs of what you invest in. You may not control the market results but you do control where you invest and the related costs of investing!! Low cost ETF's may be your best option.

No professional can make an investment recommendation for you based on the limited information you have already provided. But please be careful before you invest your life savings because the risks and costs vary widely.

Do you know what is in the Vanguard Target Retirement Income Fund? There is a high probability that fund will experience a significant downturn at some point. Either the stock market portion will get it or rising interest rates will. That doesn't mean it is a bad fund, you just need to understand the potential for volatility. You might be better off purchasing the individual funds that make up your fund and drawing down from the specific assets over time. This is the beauty of dealing with no load mutual funds, you can get the economies of scale with a relatively small amount of money. Good luck to you and be flexible with your distributions.

Rita, The answer to your question depends on your financial situation (i.e. sources of income and assets other than the $60K you mentioned), lifestyle and expenses, health and family health history, investment knowledge and experience, risk tolerance and time horizon for various financial objectives. I would suggest you hire a financial advisor who will ask for this information and then be able to provide you appropriate and effective advice. As others have stated, at 71, you can't afford to make mistakes with your retirement savings. Working with a financial advisor should increase the likelihood that you will make the right decisions and be able to maintain your lifestyle, comfort and financial security throughout retirement.

Rita,

As you know, at your age you have to be very careful what you do regarding investing your money for your retirement. Unlike a younger person, you can not afford to make a mistake primarily because you will not have enoughy time to recover any losses you may experience.

So, first I need to say that because you can not afford to lose any of your $60,000, you should only consider putting your money in the most conservative investments. Only problem is that conservative investments will not give you a very high rate of return on your money, although your principal will be very safe and you should not have to worry taking a loss.

My specific recommendations for you to consideration would be for you to put some of the $60,000 into a government insured bank CD or if you think you will want to spend some of that money soon, consider placing some of it into a bank money market fund. Check a few banks in your city to get the best rate you could find.

Another choice for you to consider is to give some or all of your money to an insurance company and put your money into an annuity that can be used to supplement your $350 per month. Because there are many choices of the type and the terms of an annuity that you can get, I suggest that you find an annuity specialist that can explain your choices to you and perhaps even make a recommendation to you. The primary reason that I like the annuity option for you is because the annuity can be structured to pay you a monthly amount and even delivered directly to your checking account. And by the way, the monthly amount can be paid as long as you live. In other words, you can structure the annuity in such a way that you will not be able to outlive the monthly annuity payments.

Good luck to you.

Sincerely,

Herbie Glass,

How much are looking to withdrawal monthly? What is the longevity in your family and how is your health? Do you have consumer debt or a mortgage? May want to consider putting half in an annuity to guarantee payments for life and then invest 20k in a high dividend etf fund and 10k in the money market for emergencies. Unfortunately 60k is not what it used to be and will not provide much of an income or cushion for health issues, etc. If you own a home without a mortgage, you may even consider a reverse mortgage to create more access to funds. Would need to know more about your situation to render a more complete answer.

Value starts to matter when the market is going down. You will never be able to figure out what the Fed is doing. I believe in technicals as much as I believe in psychics. Short-term trading is essentially a waste of time. So that leaves long-term investing. I recently wrote a blog post that addresses this very issue. You might want to read it at http://www.baldwinpartners.com/blog/running-da-bulls.

It all depends on what investment is being referred to. Whether it's an annuity or life insurance or any other type of investment there are always fees and commissions generated, either directly or indirectly. The question here that needs to be asked of your advisor is; if he/she is an insurance agent, a broker, or a Series 65 licensed investment advisor with a fiduciary obligation. The next question that should be asked; is how he/she is compensated, commission or fees, or a combination of both. The next question would be; who pays those commissions and fees to the said advisor, is it the financial institution or the consumer? Regardless, commissions and fees will be paid either directly or indirectly. In my opinion, you should always work with a firm like mine that has a fiduciary obligation to the consumer.

The best way and simplest way to ascertain the total amount of life insurance coverage you need can be based on your debts, replacement income for surviving spouse, and funding of kids education. In my 20 years the most effective financial planning tool that I have used is the FINANCIAL NEEDS ANALYSIS QUESTIONAIRRE to come up with the best possible answer on how much life insurance to own.

John, stable value funds fluctuate much less than bond funds, but they still participate in interest rate risk. In a rising interest rate and rising inflation environment, you could see your returns decrease, even to the point of being below the rate of inflation

If you are concerned about safety or income, a stable value fund may be a compelling choice. It is generally most suitable for people at or near retirement, as it is a conservative investment and there is not very much growth potential

Romika, just contact HR for requirements, if they allow it. But as others have pointed out, you should not be borrowing from a 401(k) unless it is a true dire emergency. A 401(k) is intended to save for your retirement. If you contribute to a 401(k) you should consider that money as not a liquid asset. Think of it as gone. When you reach retirement age, you may likely need it more than you think you need it now.