IRA for almost 60 year old

[Deleted]

Interesting. If it were me, after having her establish an EF in cash, I'd have her invest in Vanguard's Wellington Fund. She's able to live on her pension and save her earnings from her part time time. I'd let the mutual fund keep reinvesting those dividends as long as she can.

Yogi, will she get SS? If so, what age? If she's a widow will she have access to her husband's SS? I'm thinking that as inflation takes it's toll, the SS income can start to supplement her pension rather than draw down on the mutual funds.

I can't recall if she owns a home. If so, is it paid off? If it's paid off, she should explore the options of a reverse mortgage as another way of supplementing her income.

[yogiii]

bonnap - I was thinking about Wellington as well. She will be moving IRA CDs over as they mature. So far, only two years worth are in the Vanguard Target Retirement account. I may put a couple others into Wellington down the road. She does have an EF in cash which is enough to buy a brand new car when she needs it (probably within the next couple years). Her home is paid off, so a reverse mortgage would certainly be an option although she also has unrealistic visions of how long she'll be able to live there on her own. She's in great health now but needs to hire out things like snow removal/yard work as it is just something she never did. Also, any home repairs need to be hired out. I'm not sure when she will take SS. I know she was contemplating starting at 62. She does get widow SS but it isn't much, maybe $100/month, nothing significant.

[Deleted]

You should have her work out her own SS #s, and what the break point is for early SS vs her standard. I think the SS can be her inflation hedge for the next several years so that her accounts can continue to grow.

Is her house a two story or with a lot of steps? If not it may be a lot cheaper for her to age in place and use a reverse mortgage down the road to pay for caregivers. Also if she's not quite 60 she should immediately check into Long Term Care insurance. There's a big difference in payments if you buy it when you are in your 60s. If there's a history of Alzheimer's or other long term diseases it would be prudent to do that planning NOW.

As you can guess, DH and I are spending a lot of time on these eldercare issues!

[yogiii]

Yes, I think in the short term she'll be fine. Her house is two story but she has good family health history. Her father is mid-80's and still doing great. Drives, gets around, lives alone, looks younger than he is etc. Honestly, I think her long term care plan is moving in with me. I'm ok with that but I think it will be a rude awakening for her if she eventually moves in but my life keeps marching on and I'm not there all day to serve her ice tea. Ok, that sounded a little harsh and unfeeling but I really do not enjoy bringing up these topics of conversation with her. I just use this as a lesson for myself about how I don't want to act/ things I need to do.

[Deleted]

"I just use this as a lesson for myself about how I don't want to act/ things I need to do"

I hear you Yogi. My parents' financial situation and "retirement" plan certainly scared the cr*p out of me. My parents divorced when they were 60 & 58 after filing BK. My mom died almost 4 years ago with an estate that was upside down by about $400k. I thought it might be a race between her dying and the bank foreclosing.
And last week I found out that Dad is on county public assistance and food stamps. Right now I'm trying to keep him from doing something stupid so he doesn't risk making himself homeless.

[beenherebefore]

I'm the same age as she is and plan on working until I'm 67, also have a lot more money saved and invested. I agree with investing in low risk, dividend paying stocks. Also, I pay 10.00 per buy/sell at TD Ameritrade.
She should be socking away 1/2 of her salary into ira catch up accounts, hopefully her employer will match some of it.
If she insists on early retirement with what she has now, forget her, she's not going to listen, anyway.

[IPAfan]

I agree that the Wellington fund could be a good choice for a long term set it and forget it approach!

[Trongersoll]

Put the money in an index ETF that has a dividend of about 3%.

[Driftr]

Apr 10, 2012 14:32:43 GMT -5 Trongersoll said:

Put the money in an index ETF that has a dividend of about 3%.

DVY work for ya?