At the age of 70, I have $ 500,000 and $ 220,000 savings. How to invest your $ 130,000 unexpected?

I’m 70 years old and I get $ 130,000 in succession! For my $ 500,000 house, I have $ 70,000 CDs and $ 150,000 in high -cost savings accounts, as well as $ 500,000 in stocks and investment funds. I am lonely and I get enough social security that I can live in. I am not worried about having left nothing because they are well taken care of.

How should I invest this money?

Careful and excited

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Now your task is to plan three U – unexpected, unwanted and unanswered problems that life can cause you. And focus on the Q word – quality of life. You have accumulated a lot of money in your lifetime, which gave you a peaceful pension. However, it is also important to enjoy your life, and you have your own health and mobility.

You have enough to live, you have no debt, you have no heirs you are worried about, and you have enough investment and cash to supplement your social security income to vacation or take a new hobby like a golf. So your $ 130,000 should be used to fill your property planning gaps, especially items such as long -term maintenance.

At your age, you could pay $ 3,000 per year for long -term care insurance. It is not cheap, but given that home health fee can start at $ 6,000 a month, and nursing can cost you $ 8,000 to $ 14,000 a month, depending on where you live, something that is worth considering can be. Medicare and private health insurance do not pay for long -term care.

The Boston College Pension Research Center estimates that only one -fifth of the 65 -year -old will die without long -term services and support; a quarter will have serious needs; 22% will experience minimum needs; and 38% will have moderate needs. “Most who need support are likely to get it from relatives,” says the center of Boston College.

“Although some may need a year, when care at the institution has dealt with dementia, others may need help from relatives to recover from illness and injuries,” the research adds. “In most cases, you will not have to spend a year in the care facility to get support; only 12% of pensioners will spend 4 or more years or more in nursing homes.”

As Alicia Munnell, Marketwatch Pension Journalist and Senior Advisor to the Pension Research Center, wrote: “For those in need of care, costs may be stunning. Current national estimates have set annual nursing home care costs $ 108,000 and home health care.

“Faced with the depletion of long-term maintenance assets-the cost of pocket costs or spending on Medicaid, some people have chosen private long-term maintenance insurance. In fact, LTC insurance seems to be the right product with extreme needs of about 25%and the costs are extremely high.”

However, Munnell said older people underestimate their mortality, and the number of LTC insurance companies refused: “The combination of non -coordinating expenses and overestimating income meant that the contribution rates were significantly lower than the policy needed to support. It is impossible.

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Good news if you want to invest some or all of your $ 130,000 unexpected, you are a conservative investor, given that 44% of your assets are cash (CDs or high -level savings accounts). Because you are enough to live with social security, you will not be forced to withdraw money from your $ 500,000 portfolio per market.

You can delay a third of your carefree leisure activities and quality of life – remember that it is a large part of a pension. You can go on a cruise or travel while you can still, either on vacation in your yard and build a pool or in the future resistant to your home with a new bathroom and / or renew winter insulation to reduce the electricity account.

Set aside another third of the rainy days as cash cushions. Advisers recommend you to have at least two years of retirement costs for critical situations and while you have to compare liquid funds in the CD ladder and high -yield savings accounts, would not hurt to have some additional prepared cash (that is, check your bank).

By following a conservative approach, you can also install a third of the Fidelity Interim Bond Fund FTHRX, which invests in the US dollar denominated, investment level bonds and supports the dollar -rated average; Vanguard Intermediate Bond Index Foundation VICBX, which invests about 50% of assets in corporate bonds and 50% of the US government bonds; and / or Ishares Core US Agregate Bond ETF AGG.

Here are the exception: 70 years old is important to think about distribution and afford more than a little fun and pleasure, so you can do things you have always dreamed of. It is enough for you to live the next 20 plus a year, so you are thinking about how you want to spend your (1.) healthy years and (2.) decreasing year, assuming you have one.

“As an assessment, seek to withdraw no more than 4% to 5% of your savings during the first year of retirement, then adjust this amount for inflation each year,” says FIDELYITY. “Your sustainable withdrawal percentage will vary in view of things you cannot control (how long you live, inflation, market return) and things you can (a combination of your retirement age and investment).”

Make sure you are now making decisions when you can experience a cognitive downturn or even dementia. This applies to the people who have caused us all temporarily. You are not planning such an event. So think about the recruitment of an older care attorney and the determination of a durable power of attorney for both your financial and health care needs.

Another reason for having money in high quality bonds and stock market is to help protect against inflation. Here is a blurred theoretical scenario: on average 3% of your $ 130,000 lost about 36% of your purchase power and worth $ 83,700 in 15 years. So you get a “discount” by spending money on that house project or cruise today.

At the age of 70, investing in yourself is the name of the game.

Related:

My husband will inherit $ 180,000. I think we should invest money. He wants to pay his $ 168,000 mortgage. What’s right?

I live with my daughter and her lazy boyfriend. She wants me to buy her house.

I’m 51, earning $ 129,000 and I have $ 165,000 my 401 (k). Can I afford to retire when my husband, 59, is 62?