Mother has only $85K to sustain her

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tunka
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Mother has only $85K to sustain her

Post by tunka » Sat Apr 25, 2020 3:11 pm

My stepfather passed away two years ago and now his biological children want to sale the home while the market is hot. He had a living trust that left everything to his biological children. The trust was never updated with his wishes for her to live there.

She has only $85,000 in cash and is 78 years old. Her expenses exceed income by $500 per month. The largest expense is the apartment including utilities, is $1,300. In order to make her money last as long as possible I recommended she rent an apartment instead of using her $85k to put down on a house in order to free up the $85K to generate income. She is still independent and isn't ready to move in with her kids.

During their marriage they acquired a condo. The condo was sold after his death for $85,000 which is where her $85,000 cash comes from. It would have been nice if she were able to live there but it was not a safe neighborhood. His kids did not contest this $85,000. The value of the home that belongs to his kids and that my mother is being forced out of was about $350,000 at the time of his passing. I'm guessing that the value of the home would have been left out of the augmeted estate because the home was acquired before they married. We understand the home belongs to the kids and there is no contesting that fact. It just seems like the surviving spouse should not be forced out of the home. The $435,000 (condo plus home) are the total assets in the estate.

The primary goal is for the money to sustain her the rest of her life. She'd like to leave us something but it wouldn't surprise us if she exhausts her funds. About year and half in an assisted living center would use it up. She is generally healthy, but does have diabetes that is under control.

She does not have any investing knowledge. If I wasn't looking into this for her she would leave it in the bank.

If this was your mother what would you do with this money?

Current income:
$1,628 social security
$450 pension from first husband's employment
$2,078 total income

Emergency funds: I have not yet determined how much emergency fund she should have.

Debt: She has no debt.

Tax Filing Status: She files as single

Tax Rate: 0%

State of Residence: UT

Age: 78

Desired Asset allocation:

14% Cash - $12k equal to two years of $500 per month withdrawals
26% US Treasuries - IEI yields 1.8% = $33 per month
30% Fundrise REIT supplemental income fund yields 7% = $149 per month
7.5% S&P 500 - VFIAX yields 2.2% = $12 per month
7.5% US Large Value - IWD yields 3.5% = $19 per month
7.5% US Small Cap - IWM yields 1.8% = $10 per month
7.5% US Small Value - IWN yields 2.9% = $15 per month

Current retirement assets
No other assets except her personal belongings and furniture worth probably about $3,000.
Last edited by tunka on Sun Apr 26, 2020 2:43 pm, edited 4 times in total.

TIAX
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Re: Mother has only $85K to sustain her

Post by TIAX » Sat Apr 25, 2020 3:29 pm

Please provide breakdown of her assets, income, and liabilities.

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Sandtrap
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Re: Mother has only $85K to sustain her

Post by Sandtrap » Sat Apr 25, 2020 3:36 pm

Aloha Travis,
You will have more comprehensive suggestions based on "more data" that you can provide in this format:
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
(you can edit your original post using the "pencil icon".

** Right now, based on the very limited information given, there's a lot of incorrect assumptions that have to be made to give suggestions.

There's more to it than the funds you have listed and lot's of options.
*But, just not enough information.
You mention additional income by renting. Not sure what that means.

Or, is it simply a matter of producing $500/month from $85k to make up the shortfall?

thanks,
j :happy
Last edited by Sandtrap on Sat Apr 25, 2020 6:24 pm, edited 4 times in total.
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CAsage
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Re: Mother has only $85K to sustain her

Post by CAsage » Sat Apr 25, 2020 3:36 pm

That is way too complicated an investment plan, and none of those dividends are guaranteed. Yes, in order to reasonably answer the question one needs to know more about her overall income vs expenses. This might be a perfect situation for a Single Premium Immediate Annuity - if you look on the immediateannuities.com site, one can purchase a SPIA for a 78 year old woman with for $75,000 (keep a little cash) and get about $540 for life or $500 for life with a 10 year certain.
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David Jay
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Re: Mother has only $85K to sustain her

Post by David Jay » Sat Apr 25, 2020 3:37 pm

I would take a serious look at an SPIA (single premium immediate annuity). At her age this will provide an income stream from the $85,000 that is likely better than any other option.

One can check immediateannuities.com for examples - I find that for my state (Michigan), a 78 year old female can get an annuity paying $613 a month.

Make it $75,000 (keep a $10,000 contingency account) and it is still $541 a month (again, in Michigan).

More information on the Wiki, here: https://www.bogleheads.org/wiki/Immediate_fixed_annuity
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lakpr
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Re: Mother has only $85K to sustain her

Post by lakpr » Sat Apr 25, 2020 3:48 pm

I would drop everything into Vanguard Target Retirement Income fund (30:70 stocks to bonds ratio), and draw down $500 per month, but not exceed that limit as far as possible. You need at least some exposure to stocks to keep abreast of inflation, a 100% bonds portfolio has its own risk of falling behind inflation and be affected by interest rate hikes as well. The 30:70 portfolio and this fund are meant precisely for folks like your mother to provide a steady income.

$500 excess withdrawal per month to meet expenses = $6000 per year, is about 8% draw down rate. It's clearly unsustainable but even at a 0% further growth it should provide for about 14 years.

The annuity idea above by David Jay is also a good candidate, but understand that you are giving up the liquidity completely.

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Re: Mother has only $85K to sustain her

Post by MotoTrojan » Sat Apr 25, 2020 4:27 pm

CAsage wrote:
Sat Apr 25, 2020 3:36 pm
That is way too complicated an investment plan, and none of those dividends are guaranteed. Yes, in order to reasonably answer the question one needs to know more about her overall income vs expenses. This might be a perfect situation for a Single Premium Immediate Annuity - if you look on the immediateannuities.com site, one can purchase a SPIA for a 78 year old woman with for $75,000 (keep a little cash) and get about $540 for life or $500 for life with a 10 year certain.
Great response. If you have more than 3 funds for her you have too many; frankly a lifestrategy fund-of-funds would be fine. I agree that an SPIA is worth considering for some/all of the funds.

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Re: Mother has only $85K to sustain her

Post by Gill » Sat Apr 25, 2020 4:35 pm

CAsage wrote:
Sat Apr 25, 2020 3:36 pm
That is way too complicated an investment plan, and none of those dividends are guaranteed. Yes, in order to reasonably answer the question one needs to know more about her overall income vs expenses. This might be a perfect situation for a Single Premium Immediate Annuity - if you look on the immediateannuities.com site, one can purchase a SPIA for a 78 year old woman with for $75,000 (keep a little cash) and get about $540 for life or $500 for life with a 10 year certain.
Forget about the ten year certain and get a better payout.
Gill
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Re: Mother has only $85K to sustain her

Post by HomeStretch » Sat Apr 25, 2020 4:41 pm

Based on the limited information provided...

If my mother was age 78 with $85k in assets, my recommendation to her would be to preserve principal by putting $10k in a high yield savings account and the balance in a mix of CDs including no-penalty CDs from Ally or Marcus. If the $85k earned ~1.5%, her savings would last ~18 years (age 96) at her current expense run rates.

I would also look at her expenses for opportunities to reduce them and look into any financial assistance she might be eligible for.

If my mother ran out of money, I would provide housing, financial support, etc. Medicaid might cover any long-term care depending on her income level.

illumination
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Re: Mother has only $85K to sustain her

Post by illumination » Sat Apr 25, 2020 4:46 pm

I would also recommend an annuity, it's just too "hand to mouth" and not enough time to rely on investment growth.

Obviously nothing can be done now, but some better estate planning on their part would have made all the difference in the world.

mbasherp
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Re: Mother has only $85K to sustain her

Post by mbasherp » Sat Apr 25, 2020 4:54 pm

Another vote for SPIA. It sounds like exactly the scenario for it. Keep $10k or so in a savings account, annuitize the rest, problem solved!

At least, based on the way the situation reads now.

randomguy
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Re: Mother has only $85K to sustain her

Post by randomguy » Sat Apr 25, 2020 4:57 pm

First step should be to see if she qualifies for any government aid like housing, food or health care. That stuff tends to be state specific.

I think shoving 75k into an SPIA is too much. I know it matches here current spending liability but I think the liquidity cost is too much. I would say 40-50k would be my max. And then shove the rest of the money into some all in one fund. No need for that much complexity.

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Re: Mother has only $85K to sustain her

Post by Northern Flicker » Sat Apr 25, 2020 5:00 pm

Per an immediateannuities.com quote, it would take $70K for her to net $505/mo., depending on state of residence. This would not be inflation-adjusted, however, and the remaining $15K may be too little to cover unexpected expenses and inflation costs not covered by cost of living adjustments to social security.

A possible scenario: $10K in cash in a federally insured account, put $20K into a stock index fund like VTSAX/VTI or VLCAX/VV, and buy an income annuity (SPIA) with $55K. It appears that such an annuity would provide $412/mo. of income for the rest of her life. $10K in cash with no interest earned is 9.5 years of supplementing to $500/mo the annuity that is generating $412/mo. You probably can find a high yield money market account or local credit union where she can earn a little interest with those funds.
Risk is not a guarantor of return.

NotWhoYouThink
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Re: Mother has only $85K to sustain her

Post by NotWhoYouThink » Sat Apr 25, 2020 5:00 pm

You've made sure she is getting all she should be from his pensions, SS and estate, if any?

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cheese_breath
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Re: Mother has only $85K to sustain her

Post by cheese_breath » Sat Apr 25, 2020 5:04 pm

The $85K is only part of the picture. What are y'all doing to reduce her expenses?
The surest way to know the future is when it becomes the past.

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Re: Mother has only $85K to sustain her

Post by Herekittykitty » Sat Apr 25, 2020 5:05 pm

tunka wrote:
Sat Apr 25, 2020 3:11 pm
…….After my stepfather passed away his children made my mother find a new place to live. She has only $85,000 in cash and is 78 years old. Her expenses exceed income by $500 per month. In order to make it last as long as possible I recommended she rent an apartment in order to generate income from the $85,000. She is still independent and isn't ready to move in with her kids. If this was your mother what would you do with this money? …...
Not enough information.

How long ago did your stepfather pass away?

Does your mother have no legal right to the house or to the use of the house that she and your stepfather lived in once he passed?

Where is she living right now?

She should not make any financial decisions until she has had a chance to grieve the loss. And until she is clear on what exactly her assets, liabilities, income, and expenses are.
I don't know anything.

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JoeRetire
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Re: Mother has only $85K to sustain her

Post by JoeRetire » Sat Apr 25, 2020 5:11 pm

tunka wrote:
Sat Apr 25, 2020 3:11 pm
She has only $85,000 in cash and is 78 years old. Her expenses exceed income by $500 per month.
If she could keep it at that, she'd probably be fine.
In order to make it last as long as possible I recommended she rent an apartment in order to generate income from the $85,000.
Not sure how renting an apartment generates income?

Perhaps you mean she should keep her expenses as low as possible? If so, I agree.
And if you mean she should rent rather than buy, I also agree.
She is still independent and isn't ready to move in with her kids. If this was your mother what would you do with this money?
She may not be ready, but I'd encourage her to move in with her kids in order to minimize expenses.

There's nothing special you can do with $85,000 that can make much difference. Just put it in CDs or Money Market accounts to keep it safe. At 78, that should probably be the goal.

I assume she has Social Security and perhaps a pension as income?
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mouses
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Re: Mother has only $85K to sustain her

Post by mouses » Sat Apr 25, 2020 5:26 pm

NotWhoYouThink wrote:
Sat Apr 25, 2020 5:00 pm
You've made sure she is getting all she should be from his pensions, SS and estate, if any?
+1 I suspect the stepkids, who sound like nasty pieces of work, may be hiding income or assets that she is due. Have you seen her husband's will? If he had no will, she is perhaps entitled to a share of his estate according to state law.

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Re: Mother has only $85K to sustain her

Post by dru808 » Sat Apr 25, 2020 5:42 pm

Please don’t put it in fundrise
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Re: Mother has only $85K to sustain her

Post by dru808 » Sat Apr 25, 2020 5:45 pm

She’s got 14 years of cash if just in savings. I’d just go with that personally.
60% US equity | 25% International equity | 15% US Treasury bonds

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Re: Mother has only $85K to sustain her

Post by Jags4186 » Sat Apr 25, 2020 5:48 pm

Is your mother in good health or have longevity in her family? $85,000 in a high-interest savings account and $500 monthly withdrawals would sustain her for 15+ years. That's a route to go if she wants to leave you something. Otherwise, a SPIA is likely the best course of action.

DonIce
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Re: Mother has only $85K to sustain her

Post by DonIce » Sat Apr 25, 2020 5:54 pm

The original portfolio is absurd for a mere $85k. Probably a symptom of reading too much bogleheads about factors and slicing and dicing this and that.

At age 78 and needing to start spending down the money immediately, most of the money should be in safe assets. CDs / high yield savings/ etc. Honestly there's almost no reason to even mess with brokerage accounts, just use simple bank services. But putting 20-30% in a total market / S&P500 fund could be ok, as could putting some % in TIPS/treasuries.

As for putting all the money in an annuity... personally I'd rather have liquidity rather than a guaranteed monthly payment. You never know when a large one time expense or emergency might arise.

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cheese_breath
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Re: Mother has only $85K to sustain her

Post by cheese_breath » Sat Apr 25, 2020 6:02 pm

DonIce wrote:
Sat Apr 25, 2020 5:54 pm
The original portfolio is absurd for a mere $85k....
$85K is a lot of money to some people. Don't disparage it.
The surest way to know the future is when it becomes the past.

EHEngineer
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Re: Mother has only $85K to sustain her

Post by EHEngineer » Sat Apr 25, 2020 6:19 pm

MotoTrojan wrote:
Sat Apr 25, 2020 4:27 pm
CAsage wrote:
Sat Apr 25, 2020 3:36 pm
That is way too complicated an investment plan, and none of those dividends are guaranteed. Yes, in order to reasonably answer the question one needs to know more about her overall income vs expenses. This might be a perfect situation for a Single Premium Immediate Annuity - if you look on the immediateannuities.com site, one can purchase a SPIA for a 78 year old woman with for $75,000 (keep a little cash) and get about $540 for life or $500 for life with a 10 year certain.
Great response. If you have more than 3 funds for her you have too many; frankly a lifestrategy fund-of-funds would be fine. I agree that an SPIA is worth considering for some/all of the funds.
Agree, and here's how I would balance income v. liquidity needs: Put enough into a life annuity that she will need to withdrawl no more than 3% of her remaining funds per year.

For example, a 78F in IA who invests $65,000 in a Life SPIA gets $469 per month, per immediateannuities.com. The additional $31/month is sourced from the remaining liquid $20,000. So her withdrawl rate is ($31*12)/$20,000 = 1.9%, which is less than 3%. I would put the liquid $20,000 in high yield savings, CDs, or possibly Vanguard Target Retirment Income fund, VTINX.

Good luck to you and your Mother.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius

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Re: Mother has only $85K to sustain her

Post by dziuniek » Sat Apr 25, 2020 6:23 pm

So she needs 500/month... off of 85k...

That's 6k / year.

85/6 = 14-ish years.

Odds are = that's plenty.

After that you can certainly step in.

Either CDs or Target Retirement Income or a mix of both.

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Re: Mother has only $85K to sustain her

Post by Fallible » Sat Apr 25, 2020 6:32 pm

Sandtrap wrote:
Sat Apr 25, 2020 3:36 pm
Aloha Travis,
You will have more comprehensive suggestions based on "more data" that you can provide in this format:
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
(you can edit your original post using the "pencil icon". ...
Aloha Travis, in addition to the above, can you provide the status of your mother's health and also her knowledge of investing money? Thanks and welcome to the forum.
The first principle is that you must not fool yourself – and you are the easiest person to fool. ~Richard Feynman

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Re: Mother has only $85K to sustain her

Post by Dottie57 » Sat Apr 25, 2020 6:37 pm

David Jay wrote:
Sat Apr 25, 2020 3:37 pm
I would take a serious look at an SPIA (single premium immediate annuity). At her age this will provide an income stream from the $85,000 that is likely better than any other option.

One can check immediateannuities.com for examples - I find that for my state (Michigan), a 78 year old female can get an annuity paying $613 a month.

Make it $75,000 (keep a $10,000 contingency account) and it is still $541 a month (again, in Michigan).

More information on the Wiki, here: https://www.bogleheads.org/wiki/Immediate_fixed_annuity
+1

It gives quite a bit more cash per month for life. Mom needs income now. I really question investing at her age as she can’t afford losses and has a limited runway.

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cheese_breath
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Re: Mother has only $85K to sustain her

Post by cheese_breath » Sat Apr 25, 2020 6:44 pm

dziuniek wrote:
Sat Apr 25, 2020 6:23 pm
So she needs 500/month... off of 85k...

That's 6k / year.

85/6 = 14-ish years.
Without a better idea of her expenses and other income we really don't know that. Her expenses might or might not increase faster than her income.
The surest way to know the future is when it becomes the past.

jjface
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Re: Mother has only $85K to sustain her

Post by jjface » Sat Apr 25, 2020 6:47 pm

Work with her to reduce her expenses by $250 a month. Expenses are never set in stone. People always spend more than they need. At $250 a month that 85k will last 28 years in cash. Even if you can only shave $100 off the expenses that still means it will last 18 years.

Personally I wouldn't go all cash. I'd pick the vanguard wellesley fund (pays out 4-5% a year) or target retirement income fund. SPIA is also fine but I'd focus on getting those expenses down.

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Re: Mother has only $85K to sustain her

Post by GibsonL6s » Sat Apr 25, 2020 6:55 pm

I agree on first questioning the idea the house is not hers and she needs to move out. Check title demand copies of wills and bank accounts pension statements etc. This is not a a time to be passive you may be trying to solve a problem that doesn’t exist.

oldfort
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Re: Mother has only $85K to sustain her

Post by oldfort » Sat Apr 25, 2020 7:04 pm

At 78 and with so little assets, I would either A) buy a SPIA or B) put it all in FDIC insured CDs.

iamblessed
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Re: Mother has only $85K to sustain her

Post by iamblessed » Sat Apr 25, 2020 7:31 pm

Maybe Wellesley with dividends and capital gains it pays out about 6% a year on average. More risk that a CD but also a chance to make more.

annu
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Re: Mother has only $85K to sustain her

Post by annu » Sat Apr 25, 2020 7:34 pm

oldfort wrote:
Sat Apr 25, 2020 7:04 pm
At 78 and with so little assets, I would either A) buy a SPIA or B) put it all in FDIC insured CDs.
+1, with 85K, FDIC insured CD should be way to go and if you can, help with the income gap. I dont see the point of risking all in Stocks/Bonds, she does not seem to have any emergency funds.

Also looking into Will/Deed/rights might make more sense, if they were married, she should have some survivor rights, unless she was written out of everything, even then there should be options.

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Re: Mother has only $85K to sustain her

Post by Gill » Sat Apr 25, 2020 7:34 pm

Are you sure there’s no right of election against her husband’s estate?
Gill
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Re: Mother has only $85K to sustain her

Post by aristotelian » Sat Apr 25, 2020 7:42 pm

She is old enough that stocks are not a sure thing to have positive return, and she cannot afford to lose this money. Fundrise is way too risky. IEF 30-day SEC yield is 0.27% (you may have noticed that interest rates have plummeted).

I agree with the recommendation to put it in CDs and work on balancing her cashflow. She may not be ready to live with her kids but she may not have a choice. If the kids do not want her living with them, can they help her make up her shortfall?

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Re: Mother has only $85K to sustain her

Post by Dottie57 » Sat Apr 25, 2020 7:49 pm

GibsonL6s wrote:
Sat Apr 25, 2020 6:55 pm
I agree on first questioning the idea the house is not hers and she needs to move out. Check title demand copies of wills and bank accounts pension statements etc. This is not a a time to be passive you may be trying to solve a problem that doesn’t exist.
You might be surprised how often a second spouse is shafted.

david99
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Re: Mother has only $85K to sustain her

Post by david99 » Sat Apr 25, 2020 7:49 pm

She may qualify for subsidized housing for the elderly.

Retired1809
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Re: Mother has only $85K to sustain her

Post by Retired1809 » Sat Apr 25, 2020 9:55 pm

Has she applied to receive the monthly Social Security payment that her deceased husband received? Widows are generally eligible to begin receiving the amount their spouse had received assuming she had been married to him for at least ten years.

I don't know how much your stepfather was receiving but this potentially could make a difference in your mother's situation.

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tunka
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Re: Mother has only $85K to sustain her

Post by tunka » Sat Apr 25, 2020 11:09 pm

Retired1809 wrote:
Sat Apr 25, 2020 9:55 pm
Has she applied to receive the monthly Social Security payment that her deceased husband received? Widows are generally eligible to begin receiving the amount their spouse had received assuming she had been married to him for at least ten years.

I don't know how much your stepfather was receiving but this potentially could make a difference in your mother's situation.
She was receiving her own social security until her first husband passed, at which point she began receiving his social security because it was more. Can she get another step-up in benefits from her second husband if his is more? This is a good thought that we will look into. Thank you.

billfromct
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Re: Mother has only $85K to sustain her

Post by billfromct » Sat Apr 25, 2020 11:38 pm

The 10 year rule only applies if a person was divorced & wanted to collect SS survivor benefits from an ex spouse without remarrying before age 60.

I don't know if collecting SS survivor from an ex spouse would have any impact on collecting SS survivor benefits from a current (deceased) spouse. I believe you have to have been married for 9 months in order to collect SS survivor benefits from a current (deceased) spouse.

bill

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tunka
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Re: Mother has only $85K to sustain her

Post by tunka » Sat Apr 25, 2020 11:44 pm

Sandtrap wrote:
Sat Apr 25, 2020 3:36 pm
You will have more comprehensive suggestions based on "more data" that you can provide in this format:
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
(you can edit your original post using the "pencil icon".

You mention additional income by renting. Not sure what that means.

Or, is it simply a matter of producing $500/month from $85k to make up the shortfall?
Thanks for steering my right. I've edited the original post with additional information and in the correct format. By renting, she has the $85k available to generate income rather than using it as a down payment to buy a place.

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tunka
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Re: Mother has only $85K to sustain her

Post by tunka » Sat Apr 25, 2020 11:46 pm

TIAX wrote:
Sat Apr 25, 2020 3:29 pm
Please provide breakdown of her assets, income, and liabilities.
$85,000 cash
$3,000 personal belongings and furniture

No debt

Income is $2,078
$1,628 from social security
$450 from first husband's pension

Thank you!

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tunka
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Re: Mother has only $85K to sustain her

Post by tunka » Sun Apr 26, 2020 12:02 am

Herekittykitty wrote:
Sat Apr 25, 2020 5:05 pm

Not enough information.

How long ago did your stepfather pass away?

Does your mother have no legal right to the house or to the use of the house that she and your stepfather lived in once he passed?

Where is she living right now?

She should not make any financial decisions until she has had a chance to grieve the loss. And until she is clear on what exactly her assets, liabilities, income, and expenses are.
He passed away two years ago. She needs to be out of the house by June 1. He had a living trust with his first wife that left the house to his biological children.

phxjcc
Posts: 362
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Re: Mother has only $85K to sustain her

Post by phxjcc » Sun Apr 26, 2020 12:04 am

HomeStretch wrote:
Sat Apr 25, 2020 4:41 pm
Based on the limited information provided...

If my mother was age 78 with $85k in assets, my recommendation to her would be to preserve principal by putting $10k in a high yield savings account and the balance in a mix of CDs including no-penalty CDs from Ally or Marcus. If the $85k earned ~1.5%, her savings would last ~18 years (age 96) at her current expense run rates.

I would also look at her expenses for opportunities to reduce them and look into any financial assistance she might be eligible for.

If my mother ran out of money, I would provide housing, financial support, etc. Medicaid might cover any long-term care depending on her income level.
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GibsonL6s
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Re: Mother has only $85K to sustain her

Post by GibsonL6s » Sun Apr 26, 2020 12:07 am

Dottie57 wrote:
Sat Apr 25, 2020 7:49 pm
GibsonL6s wrote:
Sat Apr 25, 2020 6:55 pm
I agree on first questioning the idea the house is not hers and she needs to move out. Check title demand copies of wills and bank accounts pension statements etc. This is not a a time to be passive you may be trying to solve a problem that doesn’t exist.
You might be surprised how often a second spouse is shafted.
I have been a part of and heard many horrible stories related to estates, but the op needs to understand the facts in his situation.

Topic Author
tunka
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Joined: Sat Apr 25, 2020 2:09 pm

Re: Mother has only $85K to sustain her

Post by tunka » Sun Apr 26, 2020 12:23 am

Fallible wrote:
Sat Apr 25, 2020 6:32 pm
Sandtrap wrote:
Sat Apr 25, 2020 3:36 pm
Aloha Travis,
You will have more comprehensive suggestions based on "more data" that you can provide in this format:
Portfolio Review Request
https://www.bogleheads.org/forum/viewt ... =1&t=6212
(you can edit your original post using the "pencil icon". ...
Aloha Travis, in addition to the above, can you provide the status of your mother's health and also her knowledge of investing money? Thanks and welcome to the forum.
I updated the original post with her health and investing knowledge. She is generally healthy, but does have diabetes that is under control. She does not have any investing knowledge. If I wasn't looking into this for her she would leave it in the bank.

Thank you!

jjface
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Re: Mother has only $85K to sustain her

Post by jjface » Sun Apr 26, 2020 12:26 am

So does the $2078 income + $500 extra expenses needed include the new rent charges she'll have to pay if she lives alone?

Topic Author
tunka
Posts: 12
Joined: Sat Apr 25, 2020 2:09 pm

Re: Mother has only $85K to sustain her

Post by tunka » Sun Apr 26, 2020 12:40 am

annu wrote:
Sat Apr 25, 2020 7:34 pm
Also looking into Will/Deed/rights might make more sense, if they were married, she should have some survivor rights, unless she was written out of everything, even then there should be options.
We had an attorney look at the living trust my stepfather had with his first wife and it leaves the house to his biological children. It doesn't seem right that they should be able to just kick her out after living there for 10 years.

DonIce
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Re: Mother has only $85K to sustain her

Post by DonIce » Sun Apr 26, 2020 12:47 am

tunka wrote:
Sun Apr 26, 2020 12:23 am
If I wasn't looking into this for her she would leave it in the bank.

Thank you!
Unfortunately you're setting yourself up for trouble if whatever course of investing you recommend happens to not turn out well. Even if the strategy is totally solid, conflict will arise based on the outcome, not based on the correctness of the strategy. Yet another reason to stay far away from an equity-heavy allocation and stay mostly with low risk assets.

randomguy
Posts: 9038
Joined: Wed Sep 17, 2014 9:00 am

Re: Mother has only $85K to sustain her

Post by randomguy » Sun Apr 26, 2020 1:00 am

tunka wrote:
Sun Apr 26, 2020 12:40 am
annu wrote:
Sat Apr 25, 2020 7:34 pm
Also looking into Will/Deed/rights might make more sense, if they were married, she should have some survivor rights, unless she was written out of everything, even then there should be options.
We had an attorney look at the living trust my stepfather had with his first wife and it leaves the house to his biological children. It doesn't seem right that they should be able to just kick her out after living there for 10 years.
The alternative post that we have also seen on this board is the one where the kids are writing about how the second spouse is taking the family house and it isn't fair. Why should the later who only knew him for 10 years get the house when us biological kids with all those memories get nothing? It is something that should have been spelled out when before she moved in. I know lots of people like to avoid conflict and avoid thinking about these type of issues. Obviously we don't know the exact situation and I am not sure it matters much. You can't go back and change it.

Read the will. Make sure she is getting what she is entitled to (both assets wise and things like ss. ). And try and come up with plan to deal with the next 5 or so years and then think about what happens when her health declines (lots of 78 year olds can live by them selves. The ability declines rapidly as you start closing in on 90).

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