Newly widowed, how do I invest 1.5 million life ins. proceeds

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4stars
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Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by 4stars » Sun May 20, 2018 1:16 am

Hello everyone, I am brand new here but have already learned so much by reading the philosophy adopted by those on this board. I could use some collective wisdom.

My story: I am a 42 years old and my husband unexpectedly passed away a month ago. We received 1.5 million from his life insurance policy. He was the sole income earner, I am a stay at home mom with 4 kids at home, one in college. We have no debts. House paid off, college for all the kids is also paid for. My only source of monthly income now is approximately $4k a month in SS survivor's benefits (that will continue for me, even after they are not minor children because one child is disabled.) I also have 60K in savings (money market for now) that, when combined with monthly SS benefits, would get me through one year without needing to dip into the 1.5 million. I am estimating my need to be about 9k each month, so the investment would need to provide 5K/month in supplemental income. I also need to consider larger one time expenses like weddings or a vacation.

I met with three banks and also a financial planning firm. It is painful to think of paying those fees...1.25 from the financial planner and 1.1 from the bank. I am very interested in the Boglehead philosophy and just ordered some of the recommended books.

Here's my questions:
1. Would the 3 or 4 fund portfolio be a good fit for me, considering my age, my regular income needs, and my inexperience in investing?
2. Should I consider the .03% financial planning service, or would the free phone advice be sufficient? Or do I need a bank or financial planning firm?
3. Should I invest gradually, a little each month, to have a smoother entrance into the market?

Thanks for reading, any advice will be appreciated. I gotta figure this out, too important to not get it right!

cdu7
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by cdu7 » Sun May 20, 2018 6:34 am

A 3 or 4 fund portfolio would work best for almost anyone in the long term, but if you are looking for advice Vamguard has very low cost advisors that will basically set up a 3 fund portfolio for you. That said in your situation I’d want to be more conservative allocation wise. Sorry for your loss.

JoeRetire
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by JoeRetire » Sun May 20, 2018 6:52 am

4stars wrote:
Sun May 20, 2018 1:16 am
I met with three banks and also a financial planning firm. It is painful to think of paying those fees...1.25 from the financial planner and 1.1 from the bank. I am very interested in the Boglehead philosophy and just ordered some of the recommended books.
So sorry to hear of your loss.

You might consider hiring a fee-only fiduciary financial planning for a short period of time, rather than an ongoing 1.25% relationship.
For a reasonable amount of one-time dollars, the planner should be able to help you come up with an effective plan and teach you enough to feel more confident about managing it on your own.

student
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by student » Sun May 20, 2018 7:01 am

I am very sorry for your loss. I agree with cdu7 that one should be more conservative in this situation. Since you are only 42, I will use a 3% withdrawal rate (with inflation adjustment). This gives around $4,000 a month. This gives $8,000 a month with SS. So you are $1,000 short. Can you trim the budget by 10%? This will make the number works out better.

I suggest you take a look at https://www.firecalc.com/ to gather some info. I plugged in your numbers, it gives a 99% success rate if you withdraw $4,000 a month and 80% success rate if you withdraw $5,000, with 50 years of withdrawal and inflation adjustment. This means "Constant Spending Power: Future spending will be about the same as entered above, adjusted for inflation. This keeps the approximate spending power constant during the term of your retirement." It uses 75% stock and 25% bond. You can play around with the assumptions.

Edit: The above suggestion of a one-time meeting with a fee-only advisor is good.

Edit: Corrected a typo.
Last edited by student on Sun May 20, 2018 7:27 am, edited 3 times in total.

retiredjg
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by retiredjg » Sun May 20, 2018 7:16 am

4stars wrote:
Sun May 20, 2018 1:16 am
I met with three banks and also a financial planning firm. It is painful to think of paying those fees...1.25 from the financial planner and 1.1 from the bank. I am very interested in the Boglehead philosophy and just ordered some of the recommended books.
Not only would it be painful, I don't think you can afford it. Here's why.

For a portfolio to be essentially guaranteed to last many years (lets say 50 years) your withdrawal rate needs to be extremely small. In your case, let's say 2% or maybe 3% withdrawal. From $1.5 million, that would be $30k to $45k a year to start.

First, that is less than you think you'll need for living expenses. Second, that amount includes not only your state and local taxes, it also includes investment expenses. If you can take only 3% or less each year, you cannot afford to be giving 1/3rd of that to your "advisor" in the form of a 1% fee.

This is a worst case example - 2 or 3% may turn out to be more conservative than needed, the example does not take into account that you may go to work or downsize or anything along that line. It is just an example of why what seems like the tiny little 1% they are talking about is such a HUGE amount of your income.


1. Would the 3 or 4 fund portfolio be a good fit for me, considering my age, my regular income needs, and my inexperience in investing?
Yes. The 3 or 4 fund portfolio is a good fit for anyone - it is everything you need and contains nothing you don't need. Whether it (or any other portfolio) will provide the long term income you hope for will depend on how fast you take the money out.

2. Should I consider the .03% financial planning service, or would the free phone advice be sufficient? Or do I need a bank or financial planning firm?
If you are going to use any service, I suggest using the Vanguard PAS at .03% .3%. That is a rock bottom cost, they will set you up in a reasonable and low cost portfolio rather than sell you expensive stuff you don't need, and you will be free to stop using the service whenever you feel you have learned enough to manage it yourself. You can literally use the PAS as "training wheels" while you get on your feet and learn how easy portfolio management can be.

It is also quite possible you would be fine with the free phone advice alone. I'm not trying to push Vanguard's PAS, just saying if you decide to use a service, that is the only one I would suggest.

3. Should I invest gradually, a little each month, to have a smoother entrance into the market?
The right answer is to just invest the money and move on, but many people find this difficult. If you do decide to move into the market more slowly, I would get all the money in there in 6 months if you can, a year at the absolute most.
Last edited by retiredjg on Sun May 20, 2018 9:34 am, edited 1 time in total.

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cockersx3
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by cockersx3 » Sun May 20, 2018 7:38 am

4stars wrote:
Sun May 20, 2018 1:16 am
Hello everyone, I am brand new here but have already learned so much by reading the philosophy adopted by those on this board. I could use some collective wisdom.

My story: I am a 42 years old and my husband unexpectedly passed away a month ago. We received 1.5 million from his life insurance policy. He was the sole income earner, I am a stay at home mom with 4 kids at home, one in college. We have no debts. House paid off, college for all the kids is also paid for. My only source of monthly income now is approximately $4k a month in SS survivor's benefits (that will continue for me, even after they are not minor children because one child is disabled.) I also have 60K in savings (money market for now) that, when combined with monthly SS benefits, would get me through one year without needing to dip into the 1.5 million. I am estimating my need to be about 9k each month, so the investment would need to provide 5K/month in supplemental income. I also need to consider larger one time expenses like weddings or a vacation.

I met with three banks and also a financial planning firm. It is painful to think of paying those fees...1.25 from the financial planner and 1.1 from the bank. I am very interested in the Boglehead philosophy and just ordered some of the recommended books.

Here's my questions:
1. Would the 3 or 4 fund portfolio be a good fit for me, considering my age, my regular income needs, and my inexperience in investing?
2. Should I consider the .03% financial planning service, or would the free phone advice be sufficient? Or do I need a bank or financial planning firm?
3. Should I invest gradually, a little each month, to have a smoother entrance into the market?

Thanks for reading, any advice will be appreciated. I gotta figure this out, too important to not get it right!
So sorry for your loss, OP.

In response to your questions:

1) Yes, I think the three/four fund portfolio applies in cases such as yours. I was about your age and had no experience in investing when I got a similarly-sized windfall a few years back, and it fit our needs very well. Simple and low cost. There are many on this forum that use that portfolio to manage even larger sums of money than we have. I did not need the regular income from it, so don't have much experience with that side of it. However, I think this is mainly a matter of finding the right asset allocation (ie mix of stocks / bonds / other instruments) that gives you the level of security you need.

2) Absolutely recommend the Vanguard PAS program, at least initially as you get your "feet wet" with handling this money. They will basically set you up with a 4-fund portfolio, with only very minor tweaks. It's also very easy to leave PAS (takes a single email), so once you get more comfortable investing this kind of money you can drop them and go out on your own. The cost is very reasonable (actually 0.3%, not 0.03%) if you think of it as a confidence-building tool. I did this and considered it worth the money, at least initially. Ended up dropping it after about 6 months once my confidence increased.

3) Vanguard has actually written a paper on this to see whether it makes more sense to "lump sum" a given amount into the market, vs adding gradually. Worth a read. They basically found that the lump-sum (ie all at once) method is better about 2/3 of the time. I see this as a personal decision. In my case, I followed the odds and lump-sum invested the whole thing.

One other think to point out is that $5K/month works out to be a draw rate of approx 4% (=$60K/yr divided by the $1.5MM total). This seems slightly high given the length of time you'll be drawing from it. If you have any ability to be flexible with your spending and drop this amount if the market doesn't do well, it would bring up your overall success rate with making this money last.

The best piece of advice I can give you regarding the money is that this, too, shall pass. As crazy as this seems right now, there will eventually become a time where having access to this money will not be as big of a deal as it seems now. That is the most important part of the BH windfall wiki in my opinion. Based on that, your best bet is to avoid any rash decisions now, and take your time with this as much as you can.

Oh, and PLEASE PLEASE PLEASE do not sign up with the bank and financial advisor! Nearly 2.5% fees? Holy cow, that is absolutely insane. Note that most forecasters are predicting 10-year returns around 5%, so you'd be giving up nearly half your gains to these guys at no risk to them. Instead, read The Bogleheads Guide to Investing - best "simple" book out there on investing basics, I learned a ton from this early on - and call PAS in the morning to set yourself up with an advisor and talk things through with them.

cadreamer2015
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by cadreamer2015 » Sun May 20, 2018 7:45 am

So very sorry for your loss.

As others have written, the wiki on what to do with a windfall would be good reading for you. The Vanguard PAS for 0.3% might be worthwhile.

One thing others have not mentioned is a question that might take a while for you to think about and answer: Do you expect to be out of the job market for the rest of your life? Living off your investments and Social Security for what could be another 50 years or more is difficult. If you were to get a job for some period of time in the next 25 years or so, perhaps when the children are in high school or college, you will have much more financial flexibility and it might be a good thing for social and personal reasons as well.

Because your situation is significantly more complicated than the normal retiree (who I expect is the usual client of the Vanguard PAS), I agree with an earlier poster who suggested a one time visit with a fee-only financial planner. If possible, it would be best to work with a financial planner who has experience with clients in your situation.
De gustibus non est disputandum

Jags4186
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Jags4186 » Sun May 20, 2018 7:58 am

OP,

What are you doing for health insurance? I assume you got that through your husbands employment? You'll have significant income via these assets and SS and will likely have to pay a fair amount through the exchange. Not sure if that is included in your $9000/mo budget.

With regards to weddings and vacations, if you are living on $9000/mo and can barely come up with $9000/mo then there won't be many vacations or fancy weddings. Your hope is that the portfolio has significant growth in the first few years so that you can pay for them. $9000 is a lot of expenses considering your house is paid off, although I have no idea what the cost of care is for a special needs child.

RadAudit
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by RadAudit » Sun May 20, 2018 7:59 am

Sorry for your loss.

A usual piece of advice from the forum concerns managing a windfall https://www.bogleheads.org/wiki/Managing_a_windfall Might be worth a read.

Short synopsis: Take your time to decide. A suggested time frame is about a year.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

bloom2708
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by bloom2708 » Sun May 20, 2018 8:10 am

Again, very sorry for your loss.

Do not hire an adivsor or even Vanguard Personal Advisory Service for at least 3 months while you investigate a plan.

Vanguard PAS typically recommends a 4 fund portfolio (Total US, Total International, Total US Bond and Total International Bond) at your risk level.

If you are going with a 3 fund style (drop International bonds), then paying the.3% isn't worth it. You can do it yourself and you have a team of advisors here who are free.

What are your other 401k and Roth type assets? Did your husband have any retirement assets?

If you do 50/50 (stock/bond) portfolio in the 3 fund, it would look something like this at Vanguard:

30% Total US
20% Total International
50% Total US Bond

I'm using taxable bonds as your income (unless you start working outside of the home) will be low. Your expense ratio will be ~.07%. Very low and well diversified. It does not have to be more complicated than this. You do not have to take more risk than this.

If you want a single fund portfolio. LifeStrategy Conservative Growth (40/60) has the 4 funds. Adding International Bonds in. This would cost a bit more, but you would just have a single fund to deal with. No re-balancing.

Since the $1.5 million needs to be used to live on (at least for a while), I think you are OK taking out $5k/month. At that withdrawal rate, you run the risk of the funds depleting faster than you may like. That is why some say use 3.5% (instead of 4% or higher). It has better odds to come out.

$1.5 million is a lot of money, but not as much as needed for the next 50 years.

The windfall Wiki is good. Common advice is to not tell anyone the amount of the settlement.

Taylor Larimore (long time Boglehead) has written a new book. It is on sale in June. I am going to buy it myself, even though I use the 3 fund. Never hurts to read and learn more.

https://www.amazon.com/Bogleheads-Guide ... r+larimore

Keep it simple. Low cost. Use Vanguard (my preference).

Advisors just aren't on my list of things to recommend. Sorry again for your loss.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

billfromct
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by billfromct » Sun May 20, 2018 9:13 am

As others have said, you may want to get a fee only fiduciary financial planner because there are other financial issues besides investing the $1.5m insurance money, such as:
-income taxes (planning & filing status)
-rolling over a company 401k plan into a rollover IRA (I guess Vanguard could do this)
-health insurance options
-etc.

One thing to be aware of is to keep track how you spend/save your children's SS survivor benefits.

That money must be used for the children's expenses or savings. Their expenses can be clothing, their % of housing expenses (electrical, heat, etc.), their % of food, school expenses, medical expenses, etc.

I was audited by SS (not sure of the actual agency since this was 15 or 20 years ago). Since I put most of the money into a college fund (529 plan) for my 2 kids except for a high school overseas trip, so it was very easy to document. I kept the monthly SS payment tracking in a spreadsheet which I updated each month.

When the kids finished high school, SS (again I don't remember the exact agency) wanted me to turn my kid's SS savings money back to them so the Federal government could convert the money from a uniform gifts to minor account to an account in the child's name only.

What could go wrong with giving $30k-$40k to a Federal government agency so they could transfer it back to the kids? I refused, in writing, & never heard from them again.

I don't know if SS still audits children's SS survivor benefit spend, but it would be a lot easier if you kept a running talley throughout the year.

You may want to Google "does Social Security audit children's survivor benefits".

bill

tibbitts
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by tibbitts » Sun May 20, 2018 9:45 am

Sorry about your situation.

There's no way $1.5M will reliably generate anywhere near $5k/mo, and remember you have to account for inflation. In your situation a 2% withdrawal rate would be aggressive, and remember that SS benefits may be not indexed to your inflation rate, just some arbitrary inflation rate that isn't even remotely close to your own.

On the other hand I'm sure you don't "need" to spend even close to $9k/mo., you just need that to maintain your current lifestyle, which might not be in the cards.

You certainly don't need and can't afford planning help with asset allocation. I completely disagree with even using a fee-only planner for that. However you may need to revisit the estate plan you had with your husband and for that you should probably get professional help.

Jags4186
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Jags4186 » Sun May 20, 2018 10:04 am

tibbitts wrote:
Sun May 20, 2018 9:45 am
Sorry about your situation.

There's no way $1.5M will reliably generate anywhere near $5k/mo, and remember you have to account for inflation. In your situation a 2% withdrawal rate would be aggressive, and remember that SS benefits may be not indexed to your inflation rate, just some arbitrary inflation rate that isn't even remotely close to your own.

On the other hand I'm sure you don't "need" to spend even close to $9k/mo., you just need that to maintain your current lifestyle, which might not be in the cards.

You certainly don't need and can't afford planning help with asset allocation. I completely disagree with even using a fee-only planner for that. However you may need to revisit the estate plan you had with your husband and for that you should probably get professional help.
:shock: 2% withdrawal rate? Really? She’ll get more than 2% in dividend payments...

AZAttorney11
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by AZAttorney11 » Sun May 20, 2018 10:05 am

tibbitts wrote:
Sun May 20, 2018 9:45 am
In your situation a 2% withdrawal rate would be aggressive
Why? I don't agree with that at all.

tibbitts
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by tibbitts » Sun May 20, 2018 10:19 am

AZAttorney11 wrote:
Sun May 20, 2018 10:05 am
tibbitts wrote:
Sun May 20, 2018 9:45 am
In your situation a 2% withdrawal rate would be aggressive
Why? I don't agree with that at all.
Okay I should have said "In my opinion a 2% withdrawal rate would be aggressive", but I think the opinion part is kind of assumed around here. I really should have said "breathtakingly aggressive", or maybe just "nuts", but I was trying to be a little kinder-and-gentler than normal given the circumstances.

Remember the OP appears not to be bundling her "larger one-time expenses" into her withdrawal rate.

dbr
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by dbr » Sun May 20, 2018 10:34 am

An important consideration would be going to work when the children are no longer at home. This may be affected by the special needs case, but young adult and adults with special needs can often be served by programs that allow the parent to work. This has a huge effect on the issue of spending down the assets.

As to the debate about "aggressive" there is a point that long term withdrawals need to be treated carefully. It is very difficult to say whether the zone of aggressive withdrawals is 2%, 2.5%, or 3%. A major issue is that larger withdrawals may be needed now for children and can be cut back later when children are grown up. It is also obviously a personal issue, but possible remarriage and any variety of other changes in circumstances make it difficult to be doctrinaire about withdrawal plans. Certainly one can see an argument to be careful initially but also an argument to support present needs. Planning programs of the nature of FireCalc do allow for changing asset, income, and spending profiles.

Another issue is to fully understand SS. One should look at survivor vs own SS, especially in the event one might return to work.

Health insurance has been mentioned.

Also repeat the admonition that one cannot afford to pay 1% annual fees for advice. There are lots worse things than that that predatory advisors might attempt to sell as well. Good financial advice is justified. The chances of finding a good financial advisor are very poor.

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Sandtrap
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Sandtrap » Sun May 20, 2018 10:40 am

Sorry for your loss.
Here are some info and contacts that may help.
Vanguard Personal Advisory Services (feel free to ask and discuss your needs. . very low pressure folks)
https://investor.vanguard.com/financial ... ial-advice
Vanguard investment professional.
Call 877-527-4942
Monday through Friday
8 a.m. to 8 p.m., Eastern time
PARTNER WITH A VANGUARD ADVISOR

Read:
MANAGING A WINDFALL
https://www.bogleheads.org/wiki/Managing_a_windfall

You have come to an excellent place with sincere and professional help.
Continue to ask and read and learn and ask more.
aloha
j

MindBogler
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by MindBogler » Sun May 20, 2018 10:43 am

Please accept my condolences.

A simple 3 fund portfolio is a fine solution. I agree that a 4% withdrawal at your age is too aggressive. I would be targeting a 3% withdrawal rate as many others have said. That yields $45,000 in today's dollars + $48,0000 from SS and you are at $7,750/mo. If market returns are fruitful, you may be able to draw a higher percent in future years, but don't count on it.

The real key here is you absolutely must examine your expenses. If you start from the premise that you won't change anything then I believe you are setting yourself up for future hardship. At a spend rate of $9K/mo with a paid mortgage and fully funded college expenses there has to be some areas to trim back. If you can reduce your spending by 20-30% you will have nothing to worry about and some years you will be able to splurge for those one-off things! Before your spouse passed, who was handling all of the finances for the home (or was it a team effort)? Do you follow a budget?

gotester2000
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by gotester2000 » Sun May 20, 2018 10:47 am

Sorry for your loss.

You have received good suggestions.

Your husband has done quite well by providing a paid house and kids college.
If you havent handled lumpsum money go for a fee only planner. With SS and 2% withdrawal you can make 6-7k/month. You should reduce expenses - 9k seems a lot.

Get back on your feet slowly and find at least a low paying job that will pay health insurance for family. It will also help tide the loss.

4stars
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by 4stars » Sun May 20, 2018 12:15 pm

Wow, you all are so kind to take the time to help. Thank you! Regarding the $5/month I was hoping to withdraw, I could take out less. I could do 4k, possibly even 3K. I know I can trim expenses. I am preparing for the idea that I will sell the house. It is a money sucker, so big and old. It is giving us some stability at the moment though, so I thought I would wait a year or so. Health insurance through my husband's work is paid through the end of this month, and through Cobra I can continue paying it, but it is $1,700/month! I will look for other options immediately. I agree, getting a job is probably what I need to do, for health insurance and also to preserve the investment. Also, I will look into SS rules as well and document my spending. And to answer someone's question, I have 30k in an IRA, no retirement other than that. I had almost zero involvement in our finances. I didn't budget, I just tried to be frugal and sort of get a feel for what we had to spend each month. I definitely have some re-training to do, and I am confident I can do it. I am seeing clearly that I can not afford the 1-1.25% fees for a financial planner. I will use the services Vanguard offers.

One more question: The insurance check will arrive any day now. Do I "park" it in a Vanguard money market while I finish deciding what to do with it?

THANK YOU ALL gain for your willingness to take time to help me out. You all have no idea how much I needed it. Have a wonderful day.

retiredjg
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by retiredjg » Sun May 20, 2018 12:40 pm

4stars wrote:
Sun May 20, 2018 12:15 pm
Wow, you all are so kind to take the time to help. Thank you! Regarding the $5/month I was hoping to withdraw, I could take out less. I could do 4k, possibly even 3K. I know I can trim expenses. I am preparing for the idea that I will sell the house. It is a money sucker, so big and old.
Clearly you need to get rid of the money sucker, but that does not mean you need to give it up this year. As a matter of fact, I think you should NOT give it up this year as selling, buying, and moving are all major stressors. You've got enough on your plate this year. You don't need to add that just yet. I'd wait a year, possibly 2.


One more question: The insurance check will arrive any day now. Do I "park" it in a Vanguard money market while I finish deciding what to do with it?
You will probably have to park it in your bank first, but if you can send it directly to Vanguard, money market is fine if you are confident you will not let it sit there very long. No, you do not need to rush, but you do need to at least start something within a couple of months.

retiredjg
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by retiredjg » Sun May 20, 2018 12:41 pm

In case you have not stumbled on it....be sure to watch the videos.

https://www.bogleheads.org/wiki/Getting_started

dbr
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by dbr » Sun May 20, 2018 12:49 pm

retiredjg wrote:
Sun May 20, 2018 12:40 pm
4stars wrote:
Sun May 20, 2018 12:15 pm
Wow, you all are so kind to take the time to help. Thank you! Regarding the $5/month I was hoping to withdraw, I could take out less. I could do 4k, possibly even 3K. I know I can trim expenses. I am preparing for the idea that I will sell the house. It is a money sucker, so big and old.
Clearly you need to get rid of the money sucker, but that does not mean you need to give it up this year. As a matter of fact, I think you should NOT give it up this year as selling, buying, and moving are all major stressors. You've got enough on your plate this year. You don't need to add that just yet. I'd wait a year, possibly 2.


One more question: The insurance check will arrive any day now. Do I "park" it in a Vanguard money market while I finish deciding what to do with it?
You will probably have to park it in your bank first, but if you can send it directly to Vanguard, money market is fine if you are confident you will not let it sit there very long. No, you do not need to rush, but you do need to at least start something within a couple of months.
I tend to be partial to having a local bank as a point of contact with things like handling checks like this. It is good to have a person to person transaction rather than mailing things to a faceless office. They can arrange that an appropriate account is opened to hold cash for the short run. Just don't let them refer you to their "wealth manager" or start selling you things.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by cadreamer2015 » Sun May 20, 2018 12:55 pm

You certainly don't need and can't afford planning help with asset allocation. I completely disagree with even using a fee-only planner for that. However you may need to revisit the estate plan you had with your husband and for that you should probably get professional help.
I don't think the OP needs a fee-only planner to help with asset allocation (50 vs 60% equity). What is more complicated are questions like, health insurance, how to think about housing costs re staying in the current home vs. downsizing, Social Security benefits, funding for a special needs child, how to figure wages from future work into the financial picture, etc. These are a whole bunch of interrelated issues that most of us don't have to figure out all at the same time, and where the OP could benefit from the expertise of someone who has experience in all these things.

But the OP will definitely need to look at revisiting her estate plan, including guardianship, durable power of attorney, health care proxy etc.

But all these things can wait, at least a bit. Take a few breaths.
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by bogglizer » Sun May 20, 2018 12:57 pm

Even if you really need to be taking out $5K/mo now, that is likely to drop off as kids fly the coop and perhaps you downsize your house. So you may be able to afford that now, if you take into account changing needs in the future. Unfortunately, the calculation of how much you need given a non-constant withdrawal rate is not entirely trivial. If you made a guess about how much you might need, people here are more than qualified to argue about how to do it for you.

Upshot: it may not be as gloomy as some here have implied.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by billfromct » Sun May 20, 2018 2:14 pm

If you do get a job, while collecting SS, your SS benefit will be reduced $1 for every $2 over $17,000 earned per year. At full retirement age (FRA) this penalty goes away.

I waited until my FRA, age 66, to collect SS survivor benefits while still working. I will start my own SS benefits next year when I turn 70 since your own SS benefit increases by 7% or 8% each year after your FRA until age 70.

bill

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by nedsaid » Sun May 20, 2018 3:28 pm

4stars wrote:
Sun May 20, 2018 12:15 pm
Wow, you all are so kind to take the time to help. Thank you! Regarding the $5/month I was hoping to withdraw, I could take out less. I could do 4k, possibly even 3K. I know I can trim expenses. I am preparing for the idea that I will sell the house. It is a money sucker, so big and old. It is giving us some stability at the moment though, so I thought I would wait a year or so. Health insurance through my husband's work is paid through the end of this month, and through Cobra I can continue paying it, but it is $1,700/month! I will look for other options immediately. I agree, getting a job is probably what I need to do, for health insurance and also to preserve the investment. Also, I will look into SS rules as well and document my spending. And to answer someone's question, I have 30k in an IRA, no retirement other than that. I had almost zero involvement in our finances. I didn't budget, I just tried to be frugal and sort of get a feel for what we had to spend each month. I definitely have some re-training to do, and I am confident I can do it. I am seeing clearly that I can not afford the 1-1.25% fees for a financial planner. I will use the services Vanguard offers.

One more question: The insurance check will arrive any day now. Do I "park" it in a Vanguard money market while I finish deciding what to do with it?

THANK YOU ALL gain for your willingness to take time to help me out. You all have no idea how much I needed it. Have a wonderful day.
I can't imagine what you are going through now, losing a spouse at such a young age and still raising your children. You have my condolences. All I can say is don't be pressured into making investment decisions now. You are emotionally vulnerable right now, having to adjust to the loss of a spouse and also adjusting to the insurance windfall. No matter how you slice it, $1.5 million is a lot of money. Probably the best thing to do is to park the funds into a US Treasury Money Market fund and let it sit for a while, perhaps as long as six months. You have a lot to deal with now, the last thing you need now is sales pressure. If "advisors" call, just tell them no thank you.

Vanguard Advisory Service might be just for you. It is 0.3% a year, a lot cheaper than the other advisors you have been talking to. Your all-in costs will be probably 0.40% a year or so. Very cheap compared to your other options. In your situation, you probably need the handholding and reassurance that an advisor can give during tough markets. I also would not be inclined to invest aggressively, I wouldn't go over 60% stocks, you probably should be less aggressive than that.
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by tibbitts » Sun May 20, 2018 3:39 pm

The most important thing is to not make any investment decisions until you're comfortable with what you want to do. Just get the money somewhere safe where it earns a little interest. No matter what you do with it cash loses money to inflation right now but it doesn't lose that much.

Maybe the insurance company will send the check via some type of tracked service? Wow that's a lot to trust to untracked USmail, although in fairness USmail is very reliable. If I get a physical check I deposit it in my local bank account then have EFT set up to Vanguard, but be careful. One of my local bank accounts is so restrictive on outbound transfer limits that even at your age you couldn't live long enough to electronically transfer that much money out. So you absolutely have to check with your bank.

I still don't think you need any kind of advisory service even PAS. The estate plan is the most immediate concern.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by tibbitts » Sun May 20, 2018 3:45 pm

billfromct wrote:
Sun May 20, 2018 2:14 pm
If you do get a job, while collecting SS, your SS benefit will be reduced $1 for every $2 over $17,000 earned per year. At full retirement age (FRA) this penalty goes away.

I waited until my FRA, age 66, to collect SS survivor benefits while still working. I will start my own SS benefits next year when I turn 70 since your own SS benefit increases by 7% or 8% each year after your FRA until age 70.

bill
Even a very modest income from working part-time would be a huge help. Certainly that might not include insurance benefits but at least it might offset the insurance cost. The OP has a lot of her plate so a full-time job might not be the best idea right now.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by trueblueky » Sun May 20, 2018 4:17 pm

4stars wrote:
Sun May 20, 2018 1:16 am
Hello everyone, I am brand new here but have already learned so much by reading the philosophy adopted by those on this board. I could use some collective wisdom.

My story: I am a 42 years old and my husband unexpectedly passed away a month ago. We received 1.5 million from his life insurance policy. He was the sole income earner, I am a stay at home mom with 4 kids at home, one in college. We have no debts. House paid off, college for all the kids is also paid for. My only source of monthly income now is approximately $4k a month in SS survivor's benefits (that will continue for me, even after they are not minor children because one child is disabled.) I also have 60K in savings (money market for now) that, when combined with monthly SS benefits, would get me through one year without needing to dip into the 1.5 million. I am estimating my need to be about 9k each month, so the investment would need to provide 5K/month in supplemental income. I also need to consider larger one time expenses like weddings or a vacation.

I met with three banks and also a financial planning firm. It is painful to think of paying those fees...1.25 from the financial planner and 1.1 from the bank. I am very interested in the Boglehead philosophy and just ordered some of the recommended books.

Here's my questions:
1. Would the 3 or 4 fund portfolio be a good fit for me, considering my age, my regular income needs, and my inexperience in investing?
2. Should I consider the .03% financial planning service, or would the free phone advice be sufficient? Or do I need a bank or financial planning firm?
3. Should I invest gradually, a little each month, to have a smoother entrance into the market?

Thanks for reading, any advice will be appreciated. I gotta figure this out, too important to not get it right!
I'm confused about the Social Security. Doesn't it change as the children get older? Does it change when you reach 62?

Sorry for your loss.

epictetus
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by epictetus » Sun May 20, 2018 4:21 pm

you have my deepest sympathy.

you have definitely come to the right place re: asking questions and figuring out what to do.

i would encourage you to decide not to make any major decision or take any major action re: what to do with this money for 6 months. given all that you have been through it would be very hard to think clearly re: what to do.

one thing i would encourage you to do during this time is start tracking and getting a better handle on your expenses. with a paid for house and no debt I'll bet your monthly costs will be a lot less than you think. and with a little work might be a lot less than that even. the lower the monthly costs the less pressure for your money to perform and the more options you will have that will be ok re: what to do with it.

a penny saved is really more than a penny earned. and you can have a lot more control re: expenses than what your investment returns will be over time.

i would encourage you not to feel that you are behind. you are not behind. your spouse only passed away a month ago. you have plenty of time to catch your breath, let your head stop spinning at least a little, and figure out what to do
Focus on what you can control

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by aristotelian » Sun May 20, 2018 4:35 pm

OP,
I would suggest you read the free PDF essay, "If You Can" by William Bernstein. He makes a very simple case for Do-It-Yourself investing instead of going to a professional. As Bernstein says, most people with the intelligence of a 5 year old should be able to construct a simple portfolio that outperforms most professionals once you consider their fees. If you read that essay and still feel like you can't do it yourself, then you may truly be a candidate for professional help.

Regarding your last question, I would suggest moving slowly at first. Invest $100 or $1000 in whichever fund you decide is best for you just to try it. Then add another $1000 in a month. When you are comfortable making purchases, add a zero, then another zero. Pretty soon you will have the $1.5M invested and you will see that investing $1.5M is just as simple as investing $150 or $1500.

I think $5K/month is a little bit of a stretch. That amounts to a 4% withdrawal rate, which is generally regarded as a safe rate for a traditional 60+ year old retiree. The longer your time horizon, the more conservative you should be in your spending. A monthly budget of $3750 would give you a 3% withdrawal rate, which would be regarded as almost 100% safe in all circumstances. With the kids out of the house and only one individual to pay for, cutting some expense from your budget should not be a problem.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by focusedonwhatmatters » Sun May 20, 2018 5:01 pm

My condolences, 4stars. As a fellow stay-at-home widowed mom, I understand the anxiety and uncertainty of your position.

I did not receive life insurance, so I did not have the question of how to invest it. If it were me, I would immediately invest it in the 3-fund portfolio to your comfort level. I would avoid financial advisors, pay close attention to expense ratios, and hang up on all the annuity salespeople who will likely be calling you, sending you condolence cards, and promising you peace of mind and stable income for life.

I agree on tracking your expenditures of the Social Security payments. I don't know how it works with a disabled child, but regular survivor's benefits can be spent on their share of housing, clothing, etc. For regular survivor's benefits, if the child's SS payment covers more than half of his/her expenses, s/he can no longer be claimed as a dependent on your tax returns.

As for moving and going back to work, this is not the time to think about that. Right now all I would do is find a way to buckle down your expenses.

PM me if you want.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by BL » Sun May 20, 2018 5:35 pm

So sorry for your loss. I agree that this is a very stressful time that may even last a year or so, and there is never a rush to make a major decision. The important thing is not to do the things that could be a major problem later. You have enough with just the necessary business that comes up now.

Agree that parking the cash in a Vanguard money market (MM) is a reasonable decision for now. Even splitting between the treasury and the Prime MM would be reasonable, with treasury being slightly safer but a bit lower interest. Prime rate is about 1.8% I think. They are not FDIC insured like CDs or bank savings/MM, where 250k is guaranteed and you might have to spread among a bunch of banks/credit unions unless they have something called CDARS where one bank spreads it among many banks to preserve insurance (sorry, don't know any more about it). Oh, yes, I just set up check-writing system with V MM fund (minimum $250 check amount), so that is a possibility. They send you checks (maybe called drafts; banks can wait a few days before giving you the cash).

Here is a link to the 16-page pdf mentioned earlier:
https://www.etf.com/docs/IfYouCan.pdf
It puts a ton of useful info into a few easy to read pages written by a recommended author, Dr William Bernstein, for his adult children starting out investing. Especially read the last part, warning about all those folks out to get your money!

A Boglehead Guide to Investing book would be a good read. You can find the Amazon.com link here and a click on that brings you to the Boglehead books immediately. Also Jane Bryant Quinn is one of my favorites; she has been writing for magazines and has written books on personal finance decisions. Making the Most of your Money Now is one. Look for recent editions. Your library may have them as well.

The B books and the Wiki here were written by some of the experts the rest of us here have learned from and used to our advantage, and we just want to pass it on.

I would be comfortable asking Vanguard, PAS or otherwise, for some advice on investing, as V is owned by the fund purchasers (us) and they do not get commissions from suggestions like so many others do. Basically I wouldn't know who else to trust elsewhere, even though there must be some fiduciary fee-ONLY folks out there somewhere.

A 3-fund portfolio, a V balanced fund (there are many), or PAS-managed accounts would all be reasonable choices. Please keep in touch and keep us up-dated. The best to you and yours.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by David Jay » Sun May 20, 2018 6:24 pm

4stars:

1. A 2.5% withdrawal rate is considered by many to be a “perpetual” portfolio. Properly invested, one can withdraw an 2.5%, inflation adjusted (i.e. constant spending power) without depleting your capital.

2. This implies just about $3K a month from the life insurance proceeds, for a total of about $7K per month. I would start looking at your current spending habits and see what can be pared down to allow you to live on a budget of about $85,000 - $90,000 a year.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by tibbitts » Sun May 20, 2018 7:14 pm

So you can see you're getting responses that are all over the map, and I hope that doesn't discourage you. Once difference with paying someone is that yo won't pay hundreds of people to give you an opinion, so it's more difficult to judge if you're getting advice that's way out of the mainstream. You'll do well to end up somewhere in the middle of the recommendations here, just be patient and work through a few cycles of asking for advice before you do anything, think it over, and coming back for clarification or with additional information.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Tyler Aspect » Sun May 20, 2018 8:00 pm

4stars wrote:
Sun May 20, 2018 1:16 am

Here's my questions:
1. Would the 3 or 4 fund portfolio be a good fit for me, considering my age, my regular income needs, and my inexperience in investing?
2. Should I consider the .03% financial planning service, or would the free phone advice be sufficient? Or do I need a bank or financial planning firm?
3. Should I invest gradually, a little each month, to have a smoother entrance into the market?
The typical asset allocation for a retired person ranges from (60% stock / 40% bond) to (40% stock / 60% bond). Being an inexperienced investor would have you at the more bond heavy end of the spectrum, but your withdrawal period is long and could use a more stock heavy end of the spectrum. I think these two factors cancel each other out, and an allocation close to 50% stock / 50% bond should work for you.

I think it is fairly important that you manage this money yourself, because any additional expense incurred by a financial advisor would have too much cost to have this money last for you.

Usually a lump-sum investment is better than investing slowly. Alternatively target to complete your investment within one year.

The simplest way to manage your money is to own just two funds in the Vanguard family of funds. Put half of the money in Vanguard Balanced Index Admiral and the other half in Vanguard LifeStrategy Conservative Growth. That will give you a portfolio with 50% stock and 50% bond. Then adjust once per year to make sure the balance remains half and half in each fund.

Obtaining a part time job would be beneficial as well.
Last edited by Tyler Aspect on Sun May 20, 2018 8:13 pm, edited 1 time in total.
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by aristotelian » Sun May 20, 2018 8:08 pm

furnace wrote:
Sun May 20, 2018 7:06 pm
4. You need to get a job with health benefits this year. The windfall amount allows some flexibility (get a pleasant, short commute job vs high pay/high stress). The kids need to see that their mom is working hard, so they will also work hard.
I don't think anyone in this forum is in a position to tell OP what she "needs" to do. She is a career stay at home spouse, which is a job, and she has just lost her husband. I am sure her kids will understand if she takes some time to figure things out. She also has a $1.5M cushion to do so.

If death of spouse has caused termination of health insurance, she can sign up for ACA due to a qualifying event.

Saving$
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Saving$ » Sun May 20, 2018 8:37 pm

Forum ate my longer post, so the cliff notes version
Very sorry for you and your kids loss. Focus on making sure all of you make it through this ok.

You have received good advice.
1. Find a place or places to park the 1.5 mil
2. Find health insurance
3. Figure out if your husband had a 401k or IRA. With all the planning of paid college funds, paid house & life insurance, lack of a 401k/IRA would be odd. Ask your husbands employer and try to get into his email for statements that might come from IRA or previous employer 401k.
4. Instead of downsizing, think about simplifying and what that entails. It probably results in lower cost, which is one thing you need. I would not make a move for at least a year or two. Depending on the age of the kids, maybe even no move until they have each graduated.

fundseeker
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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by fundseeker » Sun May 20, 2018 8:46 pm

Sorry for your loss, but it's awesome that you and your husband have done so well financially and that you two bought life insurance. You came to the right place for great advice!

I did not read all of the replies so this may have been mentioned, but if my wife was about to receive a $1.5 million check to take to the bank, I would caution her that her deposit will likely set off alarms in the investment department, which will likely lead to many calls to "help" her invest it wisely. If somehow you are unable to avoid these sales people, if they mention the word annuity, please hang up! They may sound very tempting with some great guaranteed monthly payments, but please run any such offers by the experts here before falling for these or any other pitches.

They may also express concerns about FDIC insurance only covering $250k, which is a valid concern, and I do not have a great answer for dealing with that right now.

Anyway, please be patient with your decision making with this money and watch out for people who will absolutely take advantage of your situation. At least here, no one is telling you something for their own financial benefit. Also, it is probably wise to get this money to work for you soon, but again, please take your time.
Last edited by fundseeker on Mon May 21, 2018 4:12 am, edited 1 time in total.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by dbr » Sun May 20, 2018 8:53 pm

fundseeker wrote:
Sun May 20, 2018 8:46 pm

I did not read all of the replies so this may have been mentioned, but if my wife was about to receive a $1.5 million check to take to the bank, I would caution her that her deposit will likely see off alarms in the investment department, which will likely lead to many calls to "help" her invest it wisely. If somehow you are unable to avoid these sales people, if they mention the word annuity, please hang up! They may sound very tempting with some great guaranteed monthly payments, but please run any such offers by the experts here before falling for these or any other pitches.
This is why people here are so resistant and unenthusiastic about suggesting a person seek professional advice. The principle of seeking advice is sound. The implementation is perilous. Surviving spouses with life insurance lump sums group with naive retirees with 401k's to roll over as the low hanging fruit for predatory investment mongerers.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Momus » Sun May 20, 2018 8:53 pm

$9000/mo is A LOT. You have no mortgage or rent. Post all your monthly expenses here. Way too much spending. We need to know detailed expenses to see if you can cut some and make your money last.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Quickfoot » Sun May 20, 2018 9:29 pm

My advice would be to invest it in Vanguard's tax managed 50/50 fund (50% equity, 50% muni bonds). My instructions to my wife are to invest the 1.5M policy that would benefit her precisely that way and withdraw up to 5% of the balance annually on my birthday. If she needs less she can withdraw less. Withdrawing a fixed percent means if the balance were to drop due to a market drop the withdrawal would inherently follow the drop, conversely it will automatically adjust for inflation as well.

Given that you are inexperienced in investing you don't want to hold 3 or 4 different funds, the single fund automatically rebalances for you which even most seasoned investors fail to due during a market drop. The 50/50 asset allocation is reasonable to hold for life, the fund historically returns about 8% and minimizes taxes. 50/50 also provides good protection against market drops and reasonable upside during booms.

Can you do something that will have *slightly* lower fees? Yep. *CAN* you do something that returns a little more again yep. Is the average person likely to succeed at doing both those? Nope.

Go single fund and let the money get to work for you.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by amateurnovice » Sun May 20, 2018 9:42 pm

I would try to downsize some things and change life to live within means of that income plus your savings and life insurance proceeds for the next thirty to sixty years. Getting a plan of how you want to live and what that will cost should come before investing any of it.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by 4stars » Sun May 20, 2018 11:49 pm

Thank you all again for the advice. I see so many consistent ideas. I will pour over this over the next few months and read the recommended books. I'll answer some of the specific questions ASAP. Busy day today! One of my first tasks is to get an accurate idea of how much I really NEED to spend each month. Interestingly, after all my meetings with banks/advisors (most lasted 2+ hours), not one of them suggested cutting spending. Maybe they didn't want me to have any negative feelings, so they told me what they thought I wanted to hear. Also, the last bank I met with (BBVA Compass) IMMEDIATELY tried to sell me the "American Legacy Series B-Share Variable Annuity". She wanted me to put 700k in that. Said I really needed it because of the "guaranteed income". I instantly thought "I have a bad feeling about this", and that's when I started to research on my own. I will also focus on the other immediate issues that were suggested such as health insurance, getting clarity on my future SS benefits and the regulations/limits attached, etc. The main thing I keep hearing is don't do anything too quickly and watch out for people who have something to gain financially from their services. I will take the time needed to get this right. It is how I can honor my husband. THANK YOU ALL AGAIN for taking the time to help someone when you have nothing to benefit from it. I'm sure I will be back with more questions. :happy

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by BL » Mon May 21, 2018 12:17 am

Good for you for being alert to being SOLD high-profit items that are made to sound just perfect for you!

Banks are good for FDIC (guaranteed) fixed income: checking, savings, CDs. They are not the place for investments in non-guaranteed stocks, bonds, annuities, insurance. Dr Bernstein has some tough comments on folks who want to sell you these products in his little book or pdf, If You Can. Don't sign anything!

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by tc101 » Mon May 21, 2018 12:32 am

My wife died 6 months ago. It was the hardest thing I have ever experienced. I felt like I was going crazy.

I talked to several grief councilors. Read lots of books. Went to a grief support group. The one piece of advice they all agreed on was to avoid making any big decisions for 6-12 months. I was not and probably still am not in good shape to make a major decision.

I suggest you let the money sit in a money market fund for a year. In a few months start reading more about investing. In a year go ahead and invest the money.

There is no hurry. When my wife died I had the feeling I had to hurry up and make decisions. That is delusion. A very common delusion.
. | The most important thing you should know about me is that I am not an expert.

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Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by Always passive » Mon May 21, 2018 12:40 am

4stars wrote:
Sun May 20, 2018 1:16 am
Hello everyone, I am brand new here but have already learned so much by reading the philosophy adopted by those on this board. I could use some collective wisdom.

My story: I am a 42 years old and my husband unexpectedly passed away a month ago. We received 1.5 million from his life insurance policy. He was the sole income earner, I am a stay at home mom with 4 kids at home, one in college. We have no debts. House paid off, college for all the kids is also paid for. My only source of monthly income now is approximately $4k a month in SS survivor's benefits (that will continue for me, even after they are not minor children because one child is disabled.) I also have 60K in savings (money market for now) that, when combined with monthly SS benefits, would get me through one year without needing to dip into the 1.5 million. I am estimating my need to be about 9k each month, so the investment would need to provide 5K/month in supplemental income. I also need to consider larger one time expenses like weddings or a vacation.

I met with three banks and also a financial planning firm. It is painful to think of paying those fees...1.25 from the financial planner and 1.1 from the bank. I am very interested in the Boglehead philosophy and just ordered some of the recommended books.

Here's my questions:
1. Would the 3 or 4 fund portfolio be a good fit for me, considering my age, my regular income needs, and my inexperience in investing?
2. Should I consider the .03% financial planning service, or would the free phone advice be sufficient? Or do I need a bank or financial planning firm?
3. Should I invest gradually, a little each month, to have a smoother entrance into the market?

Thanks for reading, any advice will be appreciated. I gotta figure this out, too important to not get it right!
I think that you need two baskets
Short term - your needs for the next, say 5 years (the 3 fund portfolio will not do in the short term - too volatile)
Longer term - possibly the 3 fund portfolio
BUT since you seem to have little investing experience talk to Vanguard or other major brokers, like Fidelity. I do not suggest you do that alone.

MJS
Posts: 189
Joined: Sat Aug 05, 2017 10:55 pm

Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by MJS » Mon May 21, 2018 1:51 am

Sympathy for your loss. Admiration for the way you are taking care of your family!

Another thing to discuss with a fee-only planner is your level of life insurance, and if that should change now.

InvestorThom
Posts: 43
Joined: Sun May 07, 2017 12:10 pm

Re: Newly widowed, how do I invest 1.5 million life ins. proceeds

Post by InvestorThom » Mon May 21, 2018 2:01 am

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Last edited by InvestorThom on Mon May 21, 2018 3:29 pm, edited 1 time in total.

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