Mom Needs Monthly Income

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gonefishin
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Mom Needs Monthly Income

Post by gonefishin »

I was hoping for some advice or suggestions concerning an investment for my 88 year old mom. She is in good health and lives alone in her own mortgage-free home. She recently sold a rental property that previously supplied her with a monthly income of $340.00 after taxes and insurance. The house closing is in December, and she will be receiving approx. $40,000.00. She will still need to pay the taxes on that profit. From the remaining balance,she was hoping to be able to take a monthly withdrawal of $500.00. Currently, she receives Social Security, approx. $800.00/mo. and an annuity, with Prudential, that gives her $187.00/mo. I talked to her rep from Prudential, and he said there are very few options at her age. These are the options he gave:

A Single Premium Immediate Annuity which would give Mom $283.00/mo. with a payout life with cash refund.
Splitting the money three ways, now, to the eventual beneficiaries (three siblings), and having these three give Mom a monthly income.
For me to take the entire sum, add it to my investments, and for me to give Mom a monthly income.
Or put it in a box under the bed and use it when needed. (Rough estimate says the box goes empty in 6 years.)

I'm OK talking about her age and life expectancy. And she is also. She says she will only be around for a couple more years, whatever that will be. And us children, would definitely look after here, no matter what. I'm just looking for the best way to handle this money for her. One more thing, if she needs to go to a care home, I guess they will get everything. We neglected to do the necessary legal protections for her possessions. Even if we start now, I understand it takes five years.
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anon_investor
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Re: Mom Needs Monthly Income

Post by anon_investor »

gonefishin wrote: Thu Nov 19, 2020 12:17 pm I was hoping for some advice or suggestions concerning an investment for my 88 year old mom. She is in good health and lives alone in her own mortgage-free home. She recently sold a rental property that previously supplied her with a monthly income of $340.00 after taxes and insurance. The house closing is in December, and she will be receiving approx. $40,000.00. She will still need to pay the taxes on that profit. From the remaining balance,she was hoping to be able to take a monthly withdrawal of $500.00. Currently, she receives Social Security, approx. $800.00/mo. and an annuity, with Prudential, that gives her $187.00/mo. I talked to her rep from Prudential, and he said there are very few options at her age. These are the options he gave:

A Single Premium Immediate Annuity which would give Mom $283.00/mo. with a payout life with cash refund.
Splitting the money three ways, now, to the eventual beneficiaries (three siblings), and having these three give Mom a monthly income.
For me to take the entire sum, add it to my investments, and for me to give Mom a monthly income.
Or put it in a box under the bed and use it when needed. (Rough estimate says the box goes empty in 6 years.)

I'm OK talking about her age and life expectancy. And she is also. She says she will only be around for a couple more years, whatever that will be. And us children, would definitely look after here, no matter what. I'm just looking for the best way to handle this money for her. One more thing, if she needs to go to a care home, I guess they will get everything. We neglected to do the necessary legal protections for her possessions. Even if we start now, I understand it takes five years.
How much will the $40k be after taxes?
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JoeRetire
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Re: Mom Needs Monthly Income

Post by JoeRetire »

gonefishin wrote: Thu Nov 19, 2020 12:17 pm I was hoping for some advice or suggestions concerning an investment for my 88 year old mom.

She is in good health and lives alone in her own mortgage-free home. She recently sold a rental property that previously supplied her with a monthly income of $340.00 after taxes and insurance. The house closing is in December, and she will be receiving approx. $40,000.00. She will still need to pay the taxes on that profit. From the remaining balance,she was hoping to be able to take a monthly withdrawal of $500.00.
So she previously got by on $340, but now wants $500.
I talked to her rep from Prudential, and he said there are very few options at her age. These are the options he gave:

A Single Premium Immediate Annuity which would give Mom $283.00/mo. with a payout life with cash refund.
Splitting the money three ways, now, to the eventual beneficiaries (three siblings), and having these three give Mom a monthly income.
For me to take the entire sum, add it to my investments, and for me to give Mom a monthly income.
Or put it in a box under the bed and use it when needed. (Rough estimate says the box goes empty in 6 years.)
The rep is right, there are very few options.

IMHO, at 88, the proper option is to put it in a savings account and withdraw $500 per month until it is gone. At that point you give Mom $500 per month.

The other available option is to sell the house and rent a place to live.
She says she will only be around for a couple more years, whatever that will be.
If she is only around for a couple more years, then there is no problem.
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retiredjg
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Re: Mom Needs Monthly Income

Post by retiredjg »

Has she considered a reverse mortgage on her home?
sailaway
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Re: Mom Needs Monthly Income

Post by sailaway »

Put it in savings, as that runs low, consider a reverse mortgage or downsizing...
7eight9
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Re: Mom Needs Monthly Income

Post by 7eight9 »

If Mom is willing to eschew the cash refund on the annuity she could be receiving ~$506/month. That pretty much solves the problem.

Link --- https://www.immediateannuities.com/info ... tep-1.html
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FoolMeOnce
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Re: Mom Needs Monthly Income

Post by FoolMeOnce »

7eight9 wrote: Thu Nov 19, 2020 12:51 pm If Mom is willing to eschew the cash refund on the annuity she could be receiving ~$506/month. That pretty much solves the problem.

Link --- https://www.immediateannuities.com/info ... tep-1.html
Yup. I just did that (and input my state, because OP doesn't say), and got $443 per month for $35k (not sure what OP's mom will take home from the sale after taxes).
Jags4186
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Re: Mom Needs Monthly Income

Post by Jags4186 »

Why would there be taxes on the $40,000 proceeds from the house?

She’s 88. $500/mo out of $40,000 6.67 years. If she’s still alive at 95 you and your siblings can each pony up $167/mo.
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vineviz
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Re: Mom Needs Monthly Income

Post by vineviz »

gonefishin wrote: Thu Nov 19, 2020 12:17 pm I talked to her rep from Prudential, and he said there are very few options at her age. These are the options he gave:

A Single Premium Immediate Annuity which would give Mom $283.00/mo. with a payout life with cash refund.
You should try talking to someone else about an annuity.

Unless your mom's heirs are challenged financially I see no need to pay for the "cash refund" rider. It sounds like the primary goal is to provide for HER lifetime income, so consider skipping that feature.

I just used http://www.immediateannuities.com to price a SPIA for an 88-year old female from Mass Mutual (which is A++ rated) with a payment of $40,000 that provides a monthly income of $526/month for life. The rate at BluePrint Income is slightly less ($494) but there are lots of choices.

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HomeStretch
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Re: Mom Needs Monthly Income

Post by HomeStretch »

gonefishin wrote: Thu Nov 19, 2020 12:17 pm I talked to her rep from Prudential, and he said there are very few options at her age. These are the options he gave:

A Single Premium Immediate Annuity which would give Mom $283.00/mo. with a payout life with cash refund.
Splitting the money three ways, now, to the eventual beneficiaries (three siblings), and having these three give Mom a monthly income.
For me to take the entire sum, add it to my investments, and for me to give Mom a monthly income.
Or put it in a box under the bed and use it when needed. (Rough estimate says the box goes empty in 6 years.)
The rep missed the two better options suggested by other posters:
1. SPIA with no payout life/cash refund
2. High yield savings account in Mom’s name
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ruralavalon
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Re: Mom Needs Monthly Income

Post by ruralavalon »

7eight9 wrote: Thu Nov 19, 2020 12:51 pm If Mom is willing to eschew the cash refund on the annuity she could be receiving ~$506/month. That pretty much solves the problem.

Link --- https://www.immediateannuities.com/info ... tep-1.html
This seems like the most reasonable approach in my opinion.
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trueblueky
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Re: Mom Needs Monthly Income

Post by trueblueky »

Jags4186 wrote: Thu Nov 19, 2020 12:53 pm She’s 88. $500/mo out of $40,000 = 6.67 years. If she’s still alive at 95 you and your siblings can each pony up $167/mo.
^ In six years or sooner, she can sell her residence. OP did not say what her home is worth today.
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galawdawg
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Re: Mom Needs Monthly Income

Post by galawdawg »

Here are a few of what may be the best options:
  • Vanguard Target Retirement Income Fund (VTINX) has provided an average annual return since inception (2003) of almost 5.5%. Invest the net proceeds from the sale of the rental property and set up an automatic monthly transfer of $500 to her checking account. https://investor.vanguard.com/mutual-fu ... file/VTINX
  • One year CDs currently pay 0.65%, better than nothing.
  • A single premium immediate annuity would provide her with a lifetime stream of income. If she nets $30k from the sale of the rental property, she could receive $380/month for life. Net proceeds of $35,000 would purchase $443 for life. She'd need $40k to purchase a SPIA that produces $500/month for life. Forget about the life with cash refund options, those only reduce the monthly payments and benefit heirs after her death and it sounds like she needs the increased income. However, a SPIA only makes financial sense if she is likely to live at least six and a half more years.
Even with a return of 5% annually, a withdrawal of $500/month will exhaust those funds in just under six years, assuming she nets $30k, they will last almost seven years if she nets $35k. If she approaches the point where those funds are exhausted, she may be a good candidate for a reverse mortgage.
aristotelian
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Re: Mom Needs Monthly Income

Post by aristotelian »

Why does she need income per se? The $40k would last her 6+ years if you just stuck the $40k in cash and drew it down. If it looks like she is going to last much longer than that, she could downsize or reverse mortgage her home when the time comes.
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Re: Mom Needs Monthly Income

Post by MishkaWorries »

Why is everyone focused on $500 per month? She got by on $340 per month from the house. Let's say she nets $30,000 from the sake. She can withdraw $340 for 88 months.
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7eight9
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Re: Mom Needs Monthly Income

Post by 7eight9 »

MishkaWorries wrote: Thu Nov 19, 2020 1:58 pm Why is everyone focused on $500 per month? She got by on $340 per month from the house. Let's say she nets $30,000 from the sake. She can withdraw $340 for 88 months.
Because Mom might live more than 88 months?
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MishkaWorries
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Re: Mom Needs Monthly Income

Post by MishkaWorries »

7eight9 wrote: Thu Nov 19, 2020 1:59 pm
MishkaWorries wrote: Thu Nov 19, 2020 1:58 pm Why is everyone focused on $500 per month? She got by on $340 per month from the house. Let's say she nets $30,000 from the sake. She can withdraw $340 for 88 months.
Because Mom might live more than 88 months?
She might pass in 2 years and lose the annuity. It's all a gamble but I don't see why mom needs an extra $160 per month now that the rental is sold.

How many 95 year olds are living on their own? Sell her house and move her in with one of the kids.
We plan. G-d laughs.
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ruralavalon
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Re: Mom Needs Monthly Income

Post by ruralavalon »

MishkaWorries wrote: Thu Nov 19, 2020 2:03 pm
7eight9 wrote: Thu Nov 19, 2020 1:59 pm
MishkaWorries wrote: Thu Nov 19, 2020 1:58 pm Why is everyone focused on $500 per month? She got by on $340 per month from the house. Let's say she nets $30,000 from the sake. She can withdraw $340 for 88 months.
Because Mom might live more than 88 months?
She might pass in 2 years and lose the annuity. It's all a gamble but I don't see why mom needs an extra $160 per month now that the rental is sold.

How many 95 year olds are living on their own? Sell her house and move her in with one of the kids.
My mother lived on her own until age 97, it's best if she is healthy and wants to live independently.
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Topic Author
gonefishin
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Re: Mom Needs Monthly Income

Post by gonefishin »

Wow. I would like to thank everyone here. I knew I would get my questions answered. I'll answer some of your questions. Mom lives in PA. The state income tax rate is 3.07%. The long term capital gains would be 15%, if I am doing this right. Mom asked for more income because she has been "pinching pennies". The rep from Prudential never mentioned a plan without that rider. I'm a novice at investing, and knew no better. That annuity without a rider sounds like a great idea. I did think about a reverse mortgage, but I was looking for something simpler first. And of course I would never allow her to live poorly! Thanks again to all.
bradinsky
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Re: Mom Needs Monthly Income

Post by bradinsky »

$40000/$500 = 80 months or 6 2/3 years. Give her the $500 per month & pick up the slack if she lives longer.
retiredjg
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Re: Mom Needs Monthly Income

Post by retiredjg »

It seems possible she indicated to the salesperson a preference for a SPIA with a rider - if she thinks she will not live more than a couple of years, she would see it as a waste of money to get the SPIA without the rider.
fcf18
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Re: Mom Needs Monthly Income

Post by fcf18 »

gonefishin wrote: Thu Nov 19, 2020 2:07 pm Wow. I would like to thank everyone here. I knew I would get my questions answered. I'll answer some of your questions. Mom lives in PA. The state income tax rate is 3.07%. The long term capital gains would be 15%, if I am doing this right. Mom asked for more income because she has been "pinching pennies". The rep from Prudential never mentioned a plan without that rider. I'm a novice at investing, and knew no better. That annuity without a rider sounds like a great idea. I did think about a reverse mortgage, but I was looking for something simpler first. And of course I would never allow her to live poorly! Thanks again to all.
long term capital gain for income up to 53,000 is 0%, only after that becomes 15%. Sounds like her income for 2020 (if house is sold this year) would not be over 53,000, so there should be no tax.
https://www.investopedia.com/articles/p ... -rates.asp
BogleFan510
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Re: Mom Needs Monthly Income

Post by BogleFan510 »

JoeRetire wrote: Thu Nov 19, 2020 12:39 pm
gonefishin wrote: Thu Nov 19, 2020 12:17 pm I was hoping for some advice or suggestions concerning an investment for my 88 year old mom.

She is in good health and lives alone in her own mortgage-free home. She recently sold a rental property that previously supplied her with a monthly income of $340.00 after taxes and insurance. The house closing is in December, and she will be receiving approx. $40,000.00. She will still need to pay the taxes on that profit. From the remaining balance,she was hoping to be able to take a monthly withdrawal of $500.00.
So she previously got by on $340, but now wants $500.
I talked to her rep from Prudential, and he said there are very few options at her age. These are the options he gave:

A Single Premium Immediate Annuity which would give Mom $283.00/mo. with a payout life with cash refund.
Splitting the money three ways, now, to the eventual beneficiaries (three siblings), and having these three give Mom a monthly income.
For me to take the entire sum, add it to my investments, and for me to give Mom a monthly income.
Or put it in a box under the bed and use it when needed. (Rough estimate says the box goes empty in 6 years.)
The rep is right, there are very few options.

IMHO, at 88, the proper option is to put it in a savings account and withdraw $500 per month until it is gone. At that point you give Mom $500 per month.

The other available option is to sell the house and rent a place to live.
She says she will only be around for a couple more years, whatever that will be.
If she is only around for a couple more years, then there is no problem.
My suggestion as well. Kids chip in if account gets drained. Not much real benefit for taking investment risk. I wish her good health. Annuity is fine too, if you shop around and find a better offer.
7eight9
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Re: Mom Needs Monthly Income

Post by 7eight9 »

MishkaWorries wrote: Thu Nov 19, 2020 2:03 pm
7eight9 wrote: Thu Nov 19, 2020 1:59 pm
MishkaWorries wrote: Thu Nov 19, 2020 1:58 pm Why is everyone focused on $500 per month? She got by on $340 per month from the house. Let's say she nets $30,000 from the sake. She can withdraw $340 for 88 months.
Because Mom might live more than 88 months?
She might pass in 2 years and lose the annuity. It's all a gamble but I don't see why mom needs an extra $160 per month now that the rental is sold.

How many 95 year olds are living on their own? Sell her house and move her in with one of the kids.
It is a gamble. As Clint Eastwood famously asked, "...you've got to ask yourself one question: 'Do I feel lucky"

Moving in with the kids is not necessarily an option (or a desirable option) for many.
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cchrissyy
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Re: Mom Needs Monthly Income

Post by cchrissyy »

The house closing is in December, and she will be receiving approx. $40,000.00. She will still need to pay the taxes on that profit.
is 40k what she expects to walk away with from closing or is 40k her taxable gain?
book lover
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Re: Mom Needs Monthly Income

Post by book lover »

An 88 year old female has a life expectancy of five years. Perhaps use that number as a rough planning assumption when deciding on income needs.
oldfort
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Re: Mom Needs Monthly Income

Post by oldfort »

7eight9 wrote: Thu Nov 19, 2020 1:59 pm
MishkaWorries wrote: Thu Nov 19, 2020 1:58 pm Why is everyone focused on $500 per month? She got by on $340 per month from the house. Let's say she nets $30,000 from the sake. She can withdraw $340 for 88 months.
Because Mom might live more than 88 months?
If mom lives more than 88 months, it's more likely than not she won't be living on her own anymore. Not many 96 year olds are physically and mentally capable of independent living. She'll either move in with her kids or move into a nursing home. If she moves in with her kids, her expenses are likely to be minimal. If she moves into a nursing home, the government picks up the tab after she runs out of money.
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gonefishin
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Re: Mom Needs Monthly Income

Post by gonefishin »

I like the idea of a SPIA. I don't think Mom actually needs that much more money per month, but it was the figure she gave me. I'm not familiar with Long Term Capital Gains; until I retired this year, my employer managed my retirement. I never managed investments. Now I have a Schwab Intelligent Portfolio, which will be another question for another time. Mom is comfortable in her own home, I would like that to last as long as possible. And a reverse mortgage is there if needed. Thanks to all for the great advice.
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Re: Mom Needs Monthly Income

Post by grabiner »

fcf18 wrote: Thu Nov 19, 2020 4:00 pm
gonefishin wrote: Thu Nov 19, 2020 2:07 pm Wow. I would like to thank everyone here. I knew I would get my questions answered. I'll answer some of your questions. Mom lives in PA. The state income tax rate is 3.07%. The long term capital gains would be 15%, if I am doing this right. Mom asked for more income because she has been "pinching pennies". The rep from Prudential never mentioned a plan without that rider. I'm a novice at investing, and knew no better. That annuity without a rider sounds like a great idea. I did think about a reverse mortgage, but I was looking for something simpler first. And of course I would never allow her to live poorly! Thanks again to all.
long term capital gain for income up to 53,000 is 0%, only after that becomes 15%. Sounds like her income for 2020 (if house is sold this year) would not be over 53,000, so there should be no tax.
https://www.investopedia.com/articles/p ... -rates.asp
However, the long-term gain will count as income for making more of her SS taxable, possibly up to 85% depending on her SS amount and other income. (If taxable SS is most of her non-capital-gain income, this may still be covered by the standard deduction, resulting in a very low tax bill.)
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Re: Mom Needs Monthly Income

Post by grabiner »

book lover wrote: Thu Nov 19, 2020 4:56 pm An 88 year old female has a life expectancy of five years. Perhaps use that number as a rough planning assumption when deciding on income needs.
This average is misleading. Since she is in good health, she probably has a significantly longer life expectancy than the average 88-year-old, many of whom are known to have a short life expectancy because of cancer, heart failure, Alzheimer's, etc.
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Re: Mom Needs Monthly Income

Post by Lalamimi »

Was your father/her husband a Veteran? If they did not divorce she should be entitled to Aid and Attendance. Start with the VA website for the paperwork or perhaps a local veteran's organization has a rep who can help.

Perhaps rent a room to a middle aged woman, someone who could also be company to her.
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Re: Mom Needs Monthly Income

Post by raiderjkwong »

Energy pipeline companies are paying a 10% yield. They are a high risk investment but will pay a good dividend. Check out EPD, MMP and AMLP.
I have 275,000 invested in them and I am getting an annual payout of 30, 000. You could also invest in a real estate investment trust like O and STOR that are paying a 4.5% yield. Just ideas to explore....
rosalee
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Re: Mom Needs Monthly Income

Post by rosalee »

Aren't most energy pipelines MLPs (Master Limited Partnerships)? If considering those be aware of various accounting headaches at tax time.
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BL
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Re: Mom Needs Monthly Income

Post by BL »

7eight9 wrote: Thu Nov 19, 2020 12:51 pm If Mom is willing to eschew the cash refund on the annuity she could be receiving ~$506/month. That pretty much solves the problem.

Link --- https://www.immediateannuities.com/info ... tep-1.html
+1
If she is gone, she won't need it.

I checked immediateAnnuities.com for rates. (Or have an Independent salesperson shop around for you, not one that only looks at one company.)

You can use a tax planner website or an actual tax prep program such as HRB or TurboTax to put her numbers in and calculate. Actually there are folks here that may like to do it for you if you post all the numbers.

Please don't do any of the risky or complicated investments suggested above, for someone her age, especially. If investing, the riskiest I would even consider is something like Vanguard Target date Income Fund. Mostly cash or short-term CDs would be fine, but she would run out if long-lived. With children and house as a back-up, that is not so bad. The SPIA gives her more independence, however.
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Re: Mom Needs Monthly Income

Post by Stinky »

gonefishin wrote: Thu Nov 19, 2020 12:17 pm She is in good health and lives alone in her own mortgage-free home.
......

She says she will only be around for a couple more years, whatever that will be.
Count your blessings about having an 88 year old mother in good health, living by herself. Not many folks are in that situation.

Presuming that she is in "good health", she should be alive quite a bit longer than "a couple more years".

I agree with others that a SPIA without a "period certain" or "refund" will likely maximize her income for the rest of her life, with excellent safety.
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Re: Mom Needs Monthly Income

Post by grabiner »

raiderjkwong wrote: Thu Nov 19, 2020 11:56 pm Energy pipeline companies are paying a 10% yield. They are a high risk investment but will pay a good dividend. Check out EPD, MMP and AMLP.
I have 275,000 invested in them and I am getting an annual payout of 30, 000. You could also invest in a real estate investment trust like O and STOR that are paying a 4.5% yield. Just ideas to explore....
For these investments, part of the yield is a return of capital, so there is no economic significance to the payment; the distribution structure is eroding your principal. There are closed-end bond funds which do the same thing with less risky investments: the fund pays, say, 5% per year, but if the bonds yield only 2%, the fund sells 3% of its bonds.

I agree with other posters that none of these investments are appropriate for an 88-year-old who depends on the money. She could do the same thing with a low-risk, low-expense portfolio (something like Vanguard Target Retirement Income Fund), taking whatever yield it gives and then selling a small part of the portfolio to cover additional expenses.
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gonefishin
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Re: Mom Needs Monthly Income

Post by gonefishin »

I am fortunate that Mom is healthy at her age. And energetic. I'm going to paint her outside steps today, otherwise she will! Thank you all for the advice.
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22twain
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Re: Mom Needs Monthly Income

Post by 22twain »

MishkaWorries wrote: Thu Nov 19, 2020 2:03 pm She might pass in 2 years and lose the annuity.
Correction: her heirs would lose the remaining face value of the annuity.
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Watty
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Re: Mom Needs Monthly Income

Post by Watty »

retiredjg wrote: Thu Nov 19, 2020 12:46 pm Has she considered a reverse mortgage on her home?
+1000

How much is the house worth?

She could live on the proceeds of the rental home for the next six years or so then get a reverse mortgage when that money runs out. She might even be able to spend more then use a reverse mortgage in three or four years.

They revised the rules on reverse mortgage the about ten years ago so they are not as bad as they used to be. They still have downsides and you need to understand the details but they are a more reasonable choice when you have run out of other money.

If she lives another six years then she may be ready to sell the house and move by then anyway.
gonefishin wrote: Thu Nov 19, 2020 12:17 pm I talked to her rep from Prudential, and he said there are very few options at her age. These are the options he gave:
There might not be a lot of options but the rep is likely paid on commission so he may only be able to suggest things that Prudential sells that pay him a commission.
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gonefishin
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Re: Mom Needs Monthly Income

Post by gonefishin »

The rental house needed a new gas steam boiler. The old one cracked this past spring. The cheapest estimate to install a replacement was $5000.00. This rental is a very small house getting $600/month rent. Mom wouldn't be receiving profit from this rent for a long time. Plus, the roof is showing signs of wear and will need replacement soon. We were fortunate, I think, to find a buyer who will pay assessed value, cash, as is, with no contingencies. The buyer knows about the cracked boiler and the condition of the house. He buys these kind of properties for investment.

Mom's house is assessed at $70,000. If needed, we could do a reverse mortgage, but at this time, I don't see the need. I talked to her today and asked her how much she actually needs. She said probably $400.00/mo. would be enough, but would take $500. That makes it easier to make a plan.
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vineviz
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Re: Mom Needs Monthly Income

Post by vineviz »

gonefishin wrote: Fri Nov 20, 2020 2:02 pm I talked to her today and asked her how much she actually needs. She said probably $400.00/mo. would be enough, but would take $500. That makes it easier to make a plan.
If she can manage on something less than $500/month now, I'd suggest adding a cost-of-living adjustment to the SPIA.

Including a fixed 4% COLA in the annuity would reduce the initial payout to something closer to $450/month but that payment would increase by 4% every year. That means she wouldn't have to worry as much about inflation causing her expenses to outpace her income. For most retirees, annual expenses actually tend to increase FASTER than inflation starting at your Mom's age (mostly due to increasing healthcare and medical expenses). If she is lucky enough to live another 10 years, having $660/month will be a lot more comfortable than having just $500/month.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
Dennisl
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Re: Mom Needs Monthly Income

Post by Dennisl »

raiderjkwong wrote: Thu Nov 19, 2020 11:56 pm Energy pipeline companies are paying a 10% yield. They are a high risk investment but will pay a good dividend. Check out EPD, MMP and AMLP.
I have 275,000 invested in them and I am getting an annual payout of 30, 000. You could also invest in a real estate investment trust like O and STOR that are paying a 4.5% yield. Just ideas to explore....
too much risk for a 88 year old woman. Don't risk what you need and have for something that you don't have or need
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gonefishin
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Re: Mom Needs Monthly Income

Post by gonefishin »

Vineviz, thanks for the suggestion.
Cyanide123
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Re: Mom Needs Monthly Income

Post by Cyanide123 »

grabiner wrote: Thu Nov 19, 2020 10:22 pm
book lover wrote: Thu Nov 19, 2020 4:56 pm An 88 year old female has a life expectancy of five years. Perhaps use that number as a rough planning assumption when deciding on income needs.
This average is misleading. Since she is in good health, she probably has a significantly longer life expectancy than the average 88-year-old, many of whom are known to have a short life expectancy because of cancer, heart failure, Alzheimer's, etc.
Hard to tell at that age - one fall leads to a broken hip and for all you know they pass away within 6 months.

At that age, small falls or illnesses can really alter life expectancy. Literally, getting covid means a 7-10 percent chance of death at that age.

She might be in great health now, but it's really hard to know at that age.
000
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Re: Mom Needs Monthly Income

Post by 000 »

raiderjkwong wrote: Thu Nov 19, 2020 11:56 pm Energy pipeline companies are paying a 10% yield. They are a high risk investment but will pay a good dividend. Check out EPD, MMP and AMLP.
I have 275,000 invested in them and I am getting an annual payout of 30, 000. You could also invest in a real estate investment trust like O and STOR that are paying a 4.5% yield. Just ideas to explore....
These are close to the last way I would generate income for an 88 year old retiree.
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