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Retirement folks what are your thoughts
Ruger4me
Member, Moderator Posts: 3,804 ******
Thinking about my wife who has about $100,000.00 to invest. Can't put it all into an IRA since it is cash from sale of house, it's not from another retirement account. Thinking about annuities, it will be 2-5 years before she would need to start receiving income from it. So ideas, thoughts considerations?
Comments
If you have a broker you could have him set up a Unified Managed account. Mine has a Rate of return of 7.89% this year. Last year was over 18%.
Buy a piece of property, but this is a bad time to get into the property gig so you could invest is several REITs. Stay away from commercial property REITs. A REIT has the best return of any investment over time, better than any stock or commodity.
I would stay away from Gold, art or stamps because they fluctuate alot.
If you can hold off on when you will need the money tax free municiple bonds are a safe investment. But they usually won't mature for a while.
Thank you @Sam06 I had not thought about REITs but am looking in to those. Agree not the best time for a real estate purchase, but it was a pretty good time for her to sell it.
LSD Fidelity is who I have my IRA with so I can deliver the funds myself, but thanks for your kind offer🤣
You can do a 1031 exchange into a Reit.
Ask an investment person about Fixed Annuities. The rates are 2 - 5% and three years is usually the shortest offered. Not the greatest interest return but very safe to park some money in and not worry about it.
select-fire thanks but I don't believe that applies since it wasn't a business/investment property that was sold. It does qualify for the no tax on homes under $250,000.00 gain though since it was considered a primary residence and been over 10 years since that was claimed on a previous home.
Do not invest in an REIT right now without great consideration.
Every corporation in America is trying to figure out how to break leases and give back spaces because their workforces have transitioned to “work from home”
I'm dumber than a mud sandwich about these things, so I've always taken the advice of a fiduciary. If you are or were military, I highly recommend First Command for this. They only accept military as clients, and I've been with them since about 1974.
I have several REITs all are Dr offices and retirement homes, both are good investments, office space and strip malls not so much.
If you need a broker make sure they are a fiduciary.
We've done very well with our Edward Jones agent. Your need to be well diversified so if one thing is tanking another may be going through the roof. It's always fun to download the monthly statement and see the money grow.
Joe
Ruger......
I worked with Edward Jones over the years via tax-free municipal bonds. They have done pretty well at 4.5 to 5.5% return.....and very secure. At my age I cannot afford to be speculative.
Alas.....lately.....can only find bonds at about 2.6%.
What banks are paying.......makes one think a mattress is not such a bad idea.
I hate Greenspan......and his successor. :(
And all those do not return what you are losing due to inflation at 8 to 10% currently.
Margaret Thatcher
"There are three kinds of lies: lies, damned lies and statistics."
Mark Twain
Buy 75 of the new Colt Pythons or a similar desirable firearm. I don't think the price will go down.
I have never bought guns as an investment, but the money I've spent will be returned exponentially to my heirs when I am gone. I don't sell guns, I only buy them.
There are some tax free municipal bond funds out there as well. Depending on your tax situation they may be interesting. But as stated above there is little upside appreciation so the 4+% dividends on some may not appreciate in value so you lose over time to inflation.
So the decision depends on your specific situation. See a pro!
Spend it frivolously...Biden's govmint will take care of her when she's older. Hope you don't believe that.
Some good ideas posted here. While I like the concept of annuities, I've never found a specific one that I could/would recommend...hard to part with a big chunk of cash for a 20+-year promise from some company. Bonds and REITs take some researching/monitoring. purchasing power of cash in the mattress erodes, $100K is a bit light for many money managers. I'd also be mindful of her risk tolerance given your statement, "it will be 2-5 years before she would NEED to start receiving income from it".
IMO: without knowing the rest of her portfolio...I'd seek to minimize both principal and inflation risk. Pay off any debt (including primary mortgage), put a bit into an emergency fund, and - depending on her location/situation - look for a new real estate investment (e.g., rental property that generates a positive cash flow?).
Annuities are the Time Shares of retirement investments.
Send it to me. I'll 'invest' it in farm land. Worst case scenario, that $100K will buy enough land to make a very nice gravesite.
Anything with a decent return carries risk, FDIC insured has literally no return so inflation is eating away at your principle. Fact is any idiot or monkey could have thrown darts at a chart and made money since 2008. The mini "correction" we had at the start of covid was not even a 6 month dip.
Problem is their is so much money being tossed into the kitty that every asset class from real estate to stocks are blown out of reality.
Eventually someone is going to be a bag holder, don't be a bag holder.
Well! I came into this world with noth'n and I must be getting pretty close to leaving the same way.
That is so true. The only one who makes out for annuities is the investment company.
I got it; LEGOs!
Second hand LEGO sets are earning 11%
We have great annuities from Brighthouse, but they're so good they stopped offering them. The life value can never go down, regardless of the market but they pay 6% of the current value, based on the market. So our monthly check goes up, but can't go down below where it started - and we retain the entire initial investment as a death benefit.
Like I said, too good to be true, except that it is.