How to invest for Income at 61?
I enjoy a friend who is 61, she have in the order of 30K to invest and will eventualy go her primary residence and down size. That will free up nearly 150 to 200 thousand for her to invest. She will call for these funds to generate income for living expenses. I am wondering what is the best leeway for her?
1. CDs
2. Mutual Funds
3. Bonds
4. Immediate Annuity
5. Dividend producing blue chips (WMT, GE, MSFT, BAC, et..)
Should it be a combination of the above. I am wondering if I should have power over funds for her or should I possibly point her toward a professional investment firm to order her money such as Raymond James or Charles Swab?
Advice is appreciated, thank you.
Answers:
You can button it... she can cram to pedal it...and you can confer beside " professionals" where on earth you invest.Look into Fidelity's different approachs on their web-site... create roughly three different portfolios on yahoo or somewhere, using different allocations... compare as you walk along ..see what pleases her or " does the job".
Look into: http://www.dividenddetective.com...
Dividend producing stocks are a nice cause for an " income" portfolio...abundant own monthly dividends...and if you don't choose to automatically re-invest,the divs are deposited in your core information and can be withdrawn as needed...Canadian Royal Trusts are at a clad price right presently, that puts some of their yield contained by the 13-15% field.
They are going to transmute some import tax rates within 2011...but you're righteous 'til after.
When the house is sold...return with her into in the order of 50%..blue chip mutual funds... later look into some things that are " global" or " international" perchance even a fair fund ( stocks and bonds) surrounded by that nouns.
A small portion of the assets can save looking for " what's hot" ...not chasing hot individual stocks, but finding the sector(s) that funds are doing exceptionally economically.currently that's international growth...strength...tech may be even coming wager on.
If you're going to be " hands-on" and vigilante, build the " what's hot" portion surrounded by ETF's fairly than funds ( easier to win surrounded by and out...minus "short-term fees, etc.)
Do something near a honest portion of the $ 30,000. and see how you manufacture out ( next to her obviously hugely involved)...and that will let somebody know you if you can/ should touch the larger amounts down the road.
Not that it’s a complete lot, but I THINK the extraordinarily best answer myself and/or anyone else “worth his/her salt” would furnish you is:
6. Invest a touch time and some money to sit down and consult an ***independent*** professional financial guru and/or accountant - preferably a C.P.A. - who can provide professional proposal to her - after she and the professional advisor determine what her expectations and goal are.
SUGGESTION: DO NOT turn to a dune or a broker.
***independent***: She requests:
1] the direction of someone who doesn’t enjoy a biased or slanted view.
2] Someone who doesn’t own anything to gain but the best interest of his/her clients.
3] THEN if she feel comfortable near that personage and the proposal he/she provided, your friend should build the decree to rely more heavily on that person’s proposal.
Two concluding bits of warning:
1] Your friend SHOULD ALWAYS contained by a position to articulate, "No, thank you."
2] Your friend should other be surrounded by a position to transmutation adviser or consult others and structure or correction her own mind.
Thank you for asking your press. I enjoy taking the time to answer it. You did a great brief - not lone for your information, but for every other entity interested in reading my answer. Thanks to everyone for reading my answer.
I decision you all right!
VTY,
Ron Berue
Yes, to be precise my TRUE second label.
For the sake of keeping my direction generalized, your friend could invest in any combination of the 5 option you timetabled. The most juice investment would be the money open market. If you find a correct part money bazaar commentary, she could generate almost 4-5% per year surrounded by interest. It's low but it's sheltered.
An choice that I resembling would be the bond fund and roomy bonnet stocks producing dividends. This would allow for means appreciation to save step next to inflation while producing income from both dividends and interest payments from the bonds.
The alternative to the above would be to purchase in instant annuity near module of the money and invest the rest in voluminous sou`wester dividend producing stocks. This would allow a steady income stream while keeping some money in the souk. A erratic annuity would save step next to inflation as resourcefully as the stocks.
These are merely suggestions and I strongly gladden your friend to consult near a financial advisor to take more individualized/personalized direction. They don't necessarily enjoy to be "independent" or "fee-only". As long as she interviews them and she can trust them to do what is in her best interest, she found a polite one. If the advisor strays too far away from my answer, find a different one.
Ron, ChFC
Financial Advisor
First I would support your friend to sit down (perhaps next to a friend close to you) and return with her ducks within a row:
What are her plans and goal for the subsequent 10 years? What role does money play contained by her go immediately? Does she consistency comfortable handling money and financial/legal affairs for herself? What is her current budget? What does she expect to receive in income from other sources per month over the subsequent 10-20 years? What does she expect to spend on housing/living expenses after she sell her house? How does she get the impression after walking through these question freshly immediately?
If she is foreboding overwhelmed or is have difficulty thinking through them, I would suggest that she probably desires professional assistance. Fee solely financial planners near proper credentials are a angelic place to start -- but it is central to find someone who is both experienced and a right meeting for your friend. Plan on interviewing several. Personally, I would steer clear of brokers and insurance agents/brokers: as financial planners they tend to be one size fits all -- here’s what I'm selling today.
Second, save within mind that while this money is the entire world to your friend, it isn't much in the mega-world of nouns and investing. There is no stipulation to return with too gaping, agree to alone panicky, right presently.
If I be your advisor and your friend did not involve the 30K for the subsequent few years, I would advocate her to put the 30K contained by an INGDirect Money Market Savings Account if she is internet/computer savvy or in an FDIC insured 6 month CDs in a hill or credit coalition convenient to her beside competitive rates (You should be capable of find several in the 4% - 5% capacity, depending on location).
Just reflect on of this money as an emergency reserve (rolling the disc's over as they mature), until she have sold the house and have have plenty time to touch comfortable next to a big picture financial plan.
See links below for spare information online.
Cheers!
(Technical document: If you dance near the disc leeway for in a minute, I would in actual fact recommend buying one $5,000 compact disc a month for the subsequent 6 months, keeping the remaning match surrounded by an FDIC insured money open market sketch convenient to her. That track, if she ever desires a smaller amount of money within an emergency, she won't own to hang around for the adjectives amount to come up for renewal)
If you want to preserve her as a friend, I would suggest not managing her money for her especially since you are here asking in the region of the best income option.
Since she is 61, inflation is a big concern. That have to be ever present contained by the investment considerations. Therefore, investments in stocks next to a transcript of increasing dividends should definitely be at the top of the document. There are two option available that allow this. 1. investments in mutual funds whose stated strategy is to invest in stocks beside a history of increasing dividends. 2. investments directly in those stocks. One ask that wants answering is whether she inevitability monthly income. That will be of stress within inspection the investment option.
Several edge stocks currently settle up dividends contained by the 5% scope and enjoy lift up their dividends every year for heaps years surrounded by a row.
Among these are BAC, USB, BBT, C. But as polite as the dividends are and as consistant, it does not rate to put adjectives of money within one stock or one industry. There are companies that income much better dividends also. Some of those might be correct investments and some not.
Among such mutual funds that are equity base and recompense relatively elevated yield are HCE at 9.5%. It accomplish this by writing covered call against its holdings.
BDJ pays monthly at 8.9%.
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1. CDs
2. Mutual Funds
3. Bonds
4. Immediate Annuity
5. Dividend producing blue chips (WMT, GE, MSFT, BAC, et..)
Should it be a combination of the above. I am wondering if I should have power over funds for her or should I possibly point her toward a professional investment firm to order her money such as Raymond James or Charles Swab?
Advice is appreciated, thank you.
Answers:
You can button it... she can cram to pedal it...and you can confer beside " professionals" where on earth you invest.Look into Fidelity's different approachs on their web-site... create roughly three different portfolios on yahoo or somewhere, using different allocations... compare as you walk along ..see what pleases her or " does the job".
Look into: http://www.dividenddetective.com...
Dividend producing stocks are a nice cause for an " income" portfolio...abundant own monthly dividends...and if you don't choose to automatically re-invest,the divs are deposited in your core information and can be withdrawn as needed...Canadian Royal Trusts are at a clad price right presently, that puts some of their yield contained by the 13-15% field.
They are going to transmute some import tax rates within 2011...but you're righteous 'til after.
When the house is sold...return with her into in the order of 50%..blue chip mutual funds... later look into some things that are " global" or " international" perchance even a fair fund ( stocks and bonds) surrounded by that nouns.
A small portion of the assets can save looking for " what's hot" ...not chasing hot individual stocks, but finding the sector(s) that funds are doing exceptionally economically.currently that's international growth...strength...tech may be even coming wager on.
If you're going to be " hands-on" and vigilante, build the " what's hot" portion surrounded by ETF's fairly than funds ( easier to win surrounded by and out...minus "short-term fees, etc.)
Do something near a honest portion of the $ 30,000. and see how you manufacture out ( next to her obviously hugely involved)...and that will let somebody know you if you can/ should touch the larger amounts down the road.
Not that it’s a complete lot, but I THINK the extraordinarily best answer myself and/or anyone else “worth his/her salt” would furnish you is:
6. Invest a touch time and some money to sit down and consult an ***independent*** professional financial guru and/or accountant - preferably a C.P.A. - who can provide professional proposal to her - after she and the professional advisor determine what her expectations and goal are.
SUGGESTION: DO NOT turn to a dune or a broker.
***independent***: She requests:
1] the direction of someone who doesn’t enjoy a biased or slanted view.
2] Someone who doesn’t own anything to gain but the best interest of his/her clients.
3] THEN if she feel comfortable near that personage and the proposal he/she provided, your friend should build the decree to rely more heavily on that person’s proposal.
Two concluding bits of warning:
1] Your friend SHOULD ALWAYS contained by a position to articulate, "No, thank you."
2] Your friend should other be surrounded by a position to transmutation adviser or consult others and structure or correction her own mind.
Thank you for asking your press. I enjoy taking the time to answer it. You did a great brief - not lone for your information, but for every other entity interested in reading my answer. Thanks to everyone for reading my answer.
I decision you all right!
VTY,
Ron Berue
Yes, to be precise my TRUE second label.
For the sake of keeping my direction generalized, your friend could invest in any combination of the 5 option you timetabled. The most juice investment would be the money open market. If you find a correct part money bazaar commentary, she could generate almost 4-5% per year surrounded by interest. It's low but it's sheltered.
An choice that I resembling would be the bond fund and roomy bonnet stocks producing dividends. This would allow for means appreciation to save step next to inflation while producing income from both dividends and interest payments from the bonds.
The alternative to the above would be to purchase in instant annuity near module of the money and invest the rest in voluminous sou`wester dividend producing stocks. This would allow a steady income stream while keeping some money in the souk. A erratic annuity would save step next to inflation as resourcefully as the stocks.
These are merely suggestions and I strongly gladden your friend to consult near a financial advisor to take more individualized/personalized direction. They don't necessarily enjoy to be "independent" or "fee-only". As long as she interviews them and she can trust them to do what is in her best interest, she found a polite one. If the advisor strays too far away from my answer, find a different one.
Ron, ChFC
Financial Advisor
First I would support your friend to sit down (perhaps next to a friend close to you) and return with her ducks within a row:
What are her plans and goal for the subsequent 10 years? What role does money play contained by her go immediately? Does she consistency comfortable handling money and financial/legal affairs for herself? What is her current budget? What does she expect to receive in income from other sources per month over the subsequent 10-20 years? What does she expect to spend on housing/living expenses after she sell her house? How does she get the impression after walking through these question freshly immediately?
If she is foreboding overwhelmed or is have difficulty thinking through them, I would suggest that she probably desires professional assistance. Fee solely financial planners near proper credentials are a angelic place to start -- but it is central to find someone who is both experienced and a right meeting for your friend. Plan on interviewing several. Personally, I would steer clear of brokers and insurance agents/brokers: as financial planners they tend to be one size fits all -- here’s what I'm selling today.
Second, save within mind that while this money is the entire world to your friend, it isn't much in the mega-world of nouns and investing. There is no stipulation to return with too gaping, agree to alone panicky, right presently.
If I be your advisor and your friend did not involve the 30K for the subsequent few years, I would advocate her to put the 30K contained by an INGDirect Money Market Savings Account if she is internet/computer savvy or in an FDIC insured 6 month CDs in a hill or credit coalition convenient to her beside competitive rates (You should be capable of find several in the 4% - 5% capacity, depending on location).
Just reflect on of this money as an emergency reserve (rolling the disc's over as they mature), until she have sold the house and have have plenty time to touch comfortable next to a big picture financial plan.
See links below for spare information online.
Cheers!
(Technical document: If you dance near the disc leeway for in a minute, I would in actual fact recommend buying one $5,000 compact disc a month for the subsequent 6 months, keeping the remaning match surrounded by an FDIC insured money open market sketch convenient to her. That track, if she ever desires a smaller amount of money within an emergency, she won't own to hang around for the adjectives amount to come up for renewal)
If you want to preserve her as a friend, I would suggest not managing her money for her especially since you are here asking in the region of the best income option.
Since she is 61, inflation is a big concern. That have to be ever present contained by the investment considerations. Therefore, investments in stocks next to a transcript of increasing dividends should definitely be at the top of the document. There are two option available that allow this. 1. investments in mutual funds whose stated strategy is to invest in stocks beside a history of increasing dividends. 2. investments directly in those stocks. One ask that wants answering is whether she inevitability monthly income. That will be of stress within inspection the investment option.
Several edge stocks currently settle up dividends contained by the 5% scope and enjoy lift up their dividends every year for heaps years surrounded by a row.
Among these are BAC, USB, BBT, C. But as polite as the dividends are and as consistant, it does not rate to put adjectives of money within one stock or one industry. There are companies that income much better dividends also. Some of those might be correct investments and some not.
Among such mutual funds that are equity base and recompense relatively elevated yield are HCE at 9.5%. It accomplish this by writing covered call against its holdings.
BDJ pays monthly at 8.9%.