Hey PF,
My mom is 59 and hasn't worked in 20 years. Her parents passed away recently, leaving her $180k. I'm pretty sure this is all the money she has. She sought out a financial advisor with the following goals:
- Live off that money, but...
- Leave most of the principal untouched so she can pass it to her kids. (I think she should abandon this goal in order to improve her chances of living entirely off the money.)
Making this even more difficult, the split the money into 3 parts:
- $60k lent to Dad (to be paid back in 6 months)
- $20k in cash to live off of in the short term
- $100k to invest
The advisor is pushing her to put $50k each in:
- This variable annuity (with a 3.4% annual fee)
- A fixed index annuity called "Power Index Plus" by American General
Other details:
- She doesn't have a budget, and doesn't know what her average monthly expenses are. I've told her to get on Mint.
- Her house is worth over $1M, but if she sold it to live off the money, she would have to live somewhere kinda crappy.
- She was kept out of work for so long due to disability and addiction.
I'm pretty sure the advisor is just chasing a commission, but these products are so complicated I don't know how to properly evaluate them.
Are these products any good? If not, what would better address her needs? I'm leaning toward a fixed annuity through Vanguard but their calculator quotes less than a $500/mo benefit. Can she do better?
Thanks!
Submitted May 24, 2017 at 01:15PM by mrnaughtyboxers http://ift.tt/2qkl6KK
