Disabled and need Investment Advice

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AZOLDTIMER
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Joined: Fri Feb 09, 2018 12:05 am

Disabled and need Investment Advice

Post by AZOLDTIMER » Thu Feb 15, 2018 6:29 pm

Hello Everyone,

For over two years I have been unable to work due to several severe health problems. I am currently waiting for a hearing with Social Security to try and get Social Security Disability. I have 3 separate Doctors who wrote detailed reports for me and who have stated that I am unable to work. Regardless, our Federal Government has turned me down twice and I am now waiting ( 2 years and counting) for a hearing in front of an Administrative Law Judge.

I explain all of this because I have been without income for almost 3 years. We have exhausted our emergency funds and blown through our savings account. The only things left are my Rollover IRA and my wife's IRA and 401K

Right now the only income we have is about $800 per month take home pay , after benefits and Taxes, from my wife's job.

Our expenses are about $2,800 a month. This is simply covering the bills with no extravagances. We are frugal people who have no problem living simply. We have cut every conceivable bill possible. No expensive toys or hobbies here. Unfortunately, I will never be able to work again so even a part time job is out. I am paying Doctors and the Hospital monthly payments for previous surgeries and my Doctors anticipate more Surgeries to come. Bottom line is that my monthly expenses will not go down anytime soon.

We have been living off of our credit cards and loans to pay off the balances every 6 months or so.


Financial Situation:

Income: $800 a month bring home pay from my wife's employment

I will turn 62 in October 2018. Projected Social Security $1,200 a month.

Age: I am 61 years old and my Wife is 58 ( she will be 59.5 in October 2019)




I previously posted a thread on helping me to choose between Treasury Bonds and a CD Ladder. My thoughts are that we cannot risk any loss of principal since we are unable to save any additional funds. We need as much income as possible but it seems that safety of principal is foremost in our minds.


My question to the community is straightforward:

How to invest under our circumstances and in the present financial climate? After years of saving and investing this is not how we envisioned retirement but we play the hand we are dealt and we need to make the best of the situation.

No need to waste your time talking about cost cutting, coupons, etc. Believe me, we have researched all options and cut to the bone. The big question is how we balance safety of principal with the need to earn income.

Thank you in advance for your investment suggestions
Last edited by AZOLDTIMER on Fri Feb 16, 2018 12:25 pm, edited 1 time in total.

Jon H
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Joined: Sun Jan 21, 2018 2:50 pm

Re: Disabled and need Investment Advice

Post by Jon H » Thu Feb 15, 2018 7:26 pm

I’m sorry to hear about your tough position. You might be best off just waiting for SS. Here is an option you could consider. Live off of your assets and file for disability. Since you are so close to 65, it’s unclear if you’d complete the process by then.

Due to my spouse’s chronic disabling condition, I’ve been through this process. It made all the difference in the world to get knowledgeable legal representation. Get a lawyer experienced in elder law, even better if the lawyer knows the disability process in your area.

We needed to perform a separation of assets. Anything in my spouse’s name was collected and spent down to $0. She would not be eligible for disability benefits until this was done. We had to withdraw from IRA but did so without penalty due to medical condition. However, we did pay the tax. All of this money needed to be spent before we were eligible for disability benefits.

This process took us about two years. Being organized with paperwork will make a difference (we needed to provide about 5 years worth of electric, gas, phone, and water bills to determine level of need). They also wanted 5 years worth of bank and other retirement account info.

Needless to say, do not invest anything in your name.
Last edited by Jon H on Thu Feb 15, 2018 7:52 pm, edited 2 times in total.
Consider gain and loss, but never be greedy and everything will be alright (fortune cookie)

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Tyler Aspect
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Re: Disabled and need Investment Advice

Post by Tyler Aspect » Thu Feb 15, 2018 7:32 pm

I am thinking that a CD ladder might not be suitable for you. The nature of health expense for operations are highly variable. The cost of selling brokered CDs or the early withdraw penalty should be considered.

For your IRA I am thinking about a composition that is half in Short Term Bond Index, and half in LifeStrategy Conservative Growth. (20% stock / 80% bond)

For your wife's IRA I am thinking Target Retirement Income. (32% stock / 68% bond)

Right now you are dealing with your illness, which might cause your approach to be very conservative. However, you could still live for many years, and stock still have a limited role to play in your family's investments.
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delamer
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Joined: Tue Feb 08, 2011 6:13 pm

Re: Disabled and need Investment Advice

Post by delamer » Thu Feb 15, 2018 7:53 pm

Once you and your wife are both in Social Security, what will your total benefits be? What do you expect your expenses to be once you are both 65 and eligible for Medicare?

The difference between your Social Security benefits and your monthly expenses is what you’ll need to withdraw from your savings. You can be pretty conservative with your asset allocation if you don’t need to withdraw much, like 2% or less per year. (But do take into account what the survivor’s income needs will be once the first of you dies; the survivor’s SS will only be the same as the larger of your two benefits).

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Strayshot
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Re: Disabled and need Investment Advice

Post by Strayshot » Thu Feb 15, 2018 8:03 pm

To be completely honest, you sound like a good candidate for an annuity. I would cash out the retirement assets (avoid penalties but prepare to pay the taxes owed) and buy an annuity for your spouse with the remaining assets. A quick quote shows you would get at least 1500/month or so, which combined with your social security and your spouses income (and eventual social security) would make things work.

delamer
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Re: Disabled and need Investment Advice

Post by delamer » Thu Feb 15, 2018 8:08 pm

Strayshot wrote:
Thu Feb 15, 2018 8:03 pm
To be completely honest, you sound like a good candidate for an annuity. I would cash out the retirement assets (avoid penalties but prepare to pay the taxes owed) and buy an annuity for your spouse with the remaining assets. A quick quote shows you would get at least 1500/month or so, which combined with your social security and your spouses income (and eventual social security) would make things work.
What happens if his spouse is run over by a bus the day after the annuity takes affect?

harmony
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Re: Disabled and need Investment Advice

Post by harmony » Thu Feb 15, 2018 8:56 pm

It would have to be a two-life annuity.

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Strayshot
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Location: New Mexico

Re: Disabled and need Investment Advice

Post by Strayshot » Thu Feb 15, 2018 10:36 pm

You could do a two life annuity or you could just originate a 20 year term life policy on the spouse for 500k or so to cover the original funds. Looks like it would be about 2k/year or so which might be a better value than the reduced annuity payments from two life. Depends on life expectancy of the spouse.........

Maverick3320
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Re: Disabled and need Investment Advice

Post by Maverick3320 » Fri Feb 16, 2018 2:10 pm

OP,

You're (obviously) running a large monthly deficit. Could you lay out your monthly expenses? Perhaps we could start by helping there.

Also: there are jobs that that require very little physical work that would provide income - call service from home, for example. I understand that it wouldn't be the greatest job in the world, but you can choose your own hours and get paid for it. Literally any money coming in would help.

Ron
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Re: Disabled and need Investment Advice

Post by Ron » Fri Feb 16, 2018 3:21 pm

Jon H wrote:
Thu Feb 15, 2018 7:26 pm
<snip...>She would not be eligible for disability benefits until this was done. We had to withdraw from IRA but did so without penalty due to medical condition. However, we did pay the tax. All of this money needed to be spent before we were eligible for disability benefits.
You are writing about two different programs. The OP, as I understand it, is looking at collecting Social Security Disability in which there is no "asset test" to collect SSD.

You are writing about SSI (Supplemental Security Income), which has an asset test and usually requires the recipient to have assets not to be valued at more than $2,000.

Here's a reference for you: https://www.disabilitysecrets.com/page7-5.html

- Ron

nervouscorps
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Joined: Sun Jan 05, 2014 8:01 pm

Re: Disabled and need Investment Advice

Post by nervouscorps » Fri Feb 16, 2018 6:34 pm

If you have ongoing medical expenses that you can't reasonably pay, consider something like what we have in California called County Medical Services. Also consider speaking to a disability attorney to protect the assets you have left.

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