<#-- Rebranding: Header Logo--> <#-- Rebranding: Footer Logo-->

What is one of the safest methods to insure a conservative growth from my savings and avoid losing my estate in case of injury or sickness?

I am 66 years old and retired with a monthly income of $5,400 from a pension and Social Security. I have $250,000 in savings and $25,000 in a mutual fund. My house is paid for and worth about $125,000. I have a 15-year term life policy of $100,000. I have no debt. I intend to leave money for my two children. What is one of the safest methods to insure a conservative growth from my savings and avoid losing my estate in case of injury or sickness?

Retirement, Estate Planning, Pensions, Retirement Savings, Social Security
Answers
Sort By:
Most Helpful
March 2018

You have a good question, but it is a little challenging to answer without knowing more information.  But here are some things to consider:

  • How do you define "conservative" - some people think "no risk," while others think I could risk 40% of my portfolio and feel conservative.  If you are thinking, "it's not my risk, it's my kid's risk," then that brings more complexity into it.
  • A follow up to that is what risk do you need to take?  You mentioned that you have $5,400 in monthly income, does that give you plenty of cash flow and you can put some of that aside for future needs? 
  • Is any of this money in savings or a mutual fund deemed an IRA or Roth IRA or is it all after-tax (AKA non-qualified) money?  Will you have to take any distributions at age 70.5?
  • When you say you want to avoid losing your estate, are you saying you would prefer to not use your assets to provide for your care if you were to become injured or sick?  Would you live with one of your two kids that you mentioned if something were to happen to you and you would pay them out of your savings for that?  Would you consider a hybrid long-term care policy that would act as a life insurance policy if you didn't need it for long-term care?  Your answers would allow for better direction.
  • How is the house titled, do the kids own it and you have life use?  Do you want it that way?  Do they want the house at some point?  There are pro's and con's to this - so it's important to work with an estate planning attorney if you are interested in gifting them the house (or anything else).
  • Different states have different rules on inheritance and Medicaid (i.e. spend-down), so that will drive some of the suggestions too. 

I know this doesn't answer your question directly, but I hope it gives you additional food for thought.

March 2018
March 2018
March 2018