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Don’t take this the wrong way, but I don’t think you have enough to be investing in equities, given your assets and income level. I would seriously consider a high yield money market account, like Marcus.
Of course she has enough money to invest in equities. The issue is not money (after setting some aside for emergency funds), but time. Does she have enough time in her investment horizon at 66 years old to ride the ups and downs of the market. I think she does, if she can work for another 7 years or so.
Of course she has enough money to invest in equities. The issue is not money (after setting some aside for emergency funds), but time. Does she have enough time in her investment horizon at 66 years old to ride the ups and downs of the market. I think she does, if she can work for another 7 years or so.
I just don't know if the risk of potential depreciation with a semi-short timeframe would be worth potentially a few extra percentage points. I think that's what Lizap was getting at. Once you fund an emergency fund you might only have, say, $75K to invest and if you put it all into equities vs. something more conservative, you could end up actually losing money and with it being such a small amount I'd rather have OP sit on that money and let it grow conservatively vs. trying to hit it big with equities.
I just don't know if the risk of potential depreciation with a semi-short timeframe would be worth potentially a few extra percentage points. I think that's what Lizap was getting at. Once you fund an emergency fund you might only have, say, $75K to invest and if you put it all into equities vs. something more conservative, you could end up actually losing money and with it being such a small amount I'd rather have OP sit on that money and let it grow conservatively vs. trying to hit it big with equities.
Indeed the OP can end up losing money, there is always risk. There is risk even with "safe" investments like treasuries (#1 is inflation risk). The OP has to determine his or her own risk level and her exact goals. Equities don't mean "hitting it big", it simply promises the best return in x amount of time. The OP can also balance, as I suggested, with a equities/bonds mix.
Who is that guy that posts here obsessively all the time with spreadsheets and all that? He can run the numbers and probabilities for X years in equities vs. fixed income. I'm not always a fan of it myself because they never include life events or permutations, but there you go....
You should probably get some financial advice from someone that you know and trust; not a financial advisor who wants a cut of your inheritance.
Just to be clear, Fidelity advisors in particular are not compensated in a way that you describe. (Advisors at some other firms are, but not Fidelity).
I have $137,000 + now as I still work full time plus have social security so that's about $4,455 a month, net. Another bit of inheritance is coming but the whole process has been very slow.
I had a zoom meeting last Friday with a Fidelity advisor and the plan we came up with, based on having additional income, is not one I'm totally comfortable with (part annuity with a guaranteed monthly income, part S&P 500, with a cash fund in my bank for emergencies). It's probably just fear.
As someone here suggested to me, don't do anything you don't feel comfortable with.
I had a zoom meeting last Friday with a Fidelity advisor and the plan we came up with, based on having additional income, is not one I'm totally comfortable with (part annuity with a guaranteed monthly income, part S&P 500, with a cash fund in my bank for emergencies). It's probably just fear.
As someone here suggested to me, don't do anything you don't feel comfortable with.
Some people on here may disagree but I would not do annuities.
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Quote:
Originally Posted by Rakin
Some people on here may disagree but I would not do annuities.
Agree,
At this time, just put this extra $$$ in a short term account getting ~5% (fidelity has plenty of choices, or a local credit union)
Once you have clear view of total assets and cash flow needs.... Make a sustainable master investment plan (and probably not buy an annuity). They tie up your access to available funds, and can be costly (up front fees - sunk costs).
For self directing finances, boglehead wiki is very informative. If overwhelmed, their forum has seasoned, tho very conservative, and thoughtful replies. Any financial firm (including fidelity) will have similar recommendations, that generates adequate compensation for them (out of your pocket, into theirs). A cost of doing business.
, and providing services.
I have $137,000 + now as I still work full time plus have social security so that's about $4,455 a month, net. Another bit of inheritance is coming but the whole process has been very slow.
I had a zoom meeting last Friday with a Fidelity advisor and the plan we came up with, based on having additional income, is not one I'm totally comfortable with (part annuity with a guaranteed monthly income, part S&P 500, with a cash fund in my bank for emergencies). It's probably just fear.
As someone here suggested to me, don't do anything you don't feel comfortable with.
Investing in the S&P 500 fund (FXAIX), along with a cash fund in your bank savings account, definitely sounds like a solid plan. That's pretty much what I've been doing too, and it's been working out great so far. But I would probably also ditch the idea of getting any annuities. I had considered annuities at one point, but the people on this board quickly steered me away from them.
... obviously at 66 1/2 I have to keep making money.
TonyaJa,
The focus of your thread has been on investing your modest nest egg, and you've received some good advice here.
Your nest egg is pretty small. You can't change the past, of course; your nest egg is what it is. But I'd encourage you also to focus on ways you might increase your income. You haven't mentioned your health, but if you are in good health at 66 1/2, I'd encourage you to get a side gig or some other creative way to generate more money now while you can. At some point, you won't have the energy.
I know, that is easier said than done, and of course I don't know your skills & local economy. But even babysitting or dog walking or maybe Ubering or pretty much anything to make a buck - and put 100% of that into your nest egg.
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