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funcinderella
03-18-2008, 09:34 AM
My Mom recently and unexpedctedly became a widow at the age of 60. She has received about 900,000 in insurance money, after funeral expenses, etc. She doesn't work, and is trying to figure out the best place to put her money, but wants it safe. Anyone have any recent info on the best interest rates for savings accounts, or any other suggestions? I appreciate any help!

caa1277
03-18-2008, 09:49 AM
You might wanna try a Money Market account. You earn a little bit of interest and your money is available if and when you need it. She might wanna put half in a Money Market account for now and put some in some mutual funds or a Roth IRA for later. Not sure if there is a limit for the Roth IRA. Hopefully some others can provide more infor on the Roth IRA's.

Toby'sFriend
03-18-2008, 10:00 AM
there are several money market account out there right now paying in the 4% range. A 6 to 12 month CD would be about the same.

If it were my Mother, the house and other debt would be paid and then the rest would go into one of those accounts for at least the first 6 months.

Anyone have any recent info on the best interest rates for savings accounts, or any other suggestions? I appreciate any help!

http://www.bankrate.com

Golf4food
03-18-2008, 10:03 AM
Whatever you do, don't let someone talk you or her into putting it into a variable annuity...

Tiered CDs and a money market account are the safest bet to still earn at least some interest. At her age I'm not sure a Roth would be worth it, but it could be an option. I'd at least find a fee only financial planner to discuss her options with and to make sure you are prepared for taxes next year.

DVCJEN
03-18-2008, 10:42 AM
depending on the source of the money, it may not be eligible as an IRA deposit/rollover. CDs are a very safe(no risk) investment. Money Market is liquid. You may want to look at a combination of the two.

funcinderella
03-18-2008, 01:16 PM
Thanks for your responses!

ceecee
03-18-2008, 01:37 PM
All annuities aren't bad and some are quite good, money market accts are really paying low rates as are CDs. Our two annuities are doing quite well considering the market right now.

ceecee
03-18-2008, 01:38 PM
All annuities aren't bad and some are quite good, money market accts are really paying low rates as are CDs. Our two annuities are doing quite well considering the market right now. She is still young and has quite a bit to invest (assuming there are no outstanding debts) so she should diversify her accounts.

BuzznBelle'smom
03-18-2008, 01:46 PM
She really would be best off talking to a financial planner. As a PP suggested, a fee-only one would charge her for his/her time, but not make money off the investments. That means that the planner will give your mom what's right for her, and not what generates the highest commission.

A few thoughts: If your mom has no other income stream (work, pension), then she might want to set one up. Annuities can be right for some people. She also might want to pay off an outstanding mortgage or any other debts.

You can only have $100k at any given bank. That means that you would have to have several Cds at different banks if she went that route. Just make sure she keeps track of where!

I suggest she put the money away in safe vehicles such as CDs, and then educate herself on investing. It's not hard, and if this money is to last her for a long time, she should be educated.

I wish you both luck.

DVCJEN
03-18-2008, 01:51 PM
You can only have $100k at any given bank. That means that you would have to have several Cds at different banks if she went that route. Just make sure she keeps track of where!



I wish you both luck.

You can have more than $100K at any bank. The $100K is just FDIC insurance threshholds for insurance coverage.

SuzanneSLO
03-18-2008, 06:59 PM
After paying off large debts like mortgage, suggest she put it into an interest bearing account such as a money market fund of CD as suggested and DO NOTHING else for at least 6 months. She has had a major unexpected life change and she does not need the added stress of becoming an investing expert at this time.

Then when she can catch her breath and start to think about the future, the money will be there and she can consider about other options (including those that a fee-only planner may suggest).

Best of luck to both of you in this difficult time. -- Suzanne

kandeebunny
03-18-2008, 07:19 PM
My mom became a window at 48 VERY unexpectedly.

She paid off the house, and then put the rest in a CD for about a year while she looked at options. It was there if she needed it to be, but she wasn'tp ressed to make any instant decisions.

minkydog
03-18-2008, 07:30 PM
After paying off large debts like mortgage, suggest she put it into an interest bearing account such as a money market fund of CD as suggested and DO NOTHING else for at least 6 months. She has had a major unexpected life change and she does not need the added stress of becoming an investing expert at this time.

Then when she can catch her breath and start to think about the future, the money will be there and she can consider about other options (including those that a fee-only planner may suggest).

Best of luck to both of you in this difficult time. -- Suzanne

I absolutely agree 100%:thumbsup2 It's so hard to think straight when someone you love dies. I am not widowed, but I came into a fairly large sum of money a few years ago when my father died. I really did not know what to do with it, but I had enough sense to know I could easily fritter it away. I just parked my money in an interest-bearing savings acct and left it until I could get my bearings, about a year. I had to pay taxes on the interest, but it felt right to me just taking my time on the investing. I found a savvy financial planner who is helping me make wise decisions so that even in this economy, my investments are making money:thumbsup2

Best of luck to your mom, whatever she decides. It's okay to just give it some time.

Cheshire Figment
03-18-2008, 08:17 PM
My mother, who lives in New York City, describes herself as "a widow and orphan" (she is 93) and invests very conservatively. She does have a pension and Social Security, but has all of her investments in high grade tax free bonds from within New York State so she does not pay income taxes on them at all.

I just checked my spreadsheet and she gets 4.57% as the weighted average with interest ranging betwen 3.00% and 5.75%. (I'm a CPA and do her taxes.)

If she were to put $800,000 spread out in NJ munis she would be getting almost $40,000 per year free of federal and state income taxes. And if she has other sources of income (currently employed, pension, etc.) the amount can keep building up every year.

dsanner106
03-18-2008, 08:27 PM
I read recently that if you reach the age of 60 you have nearly a 50 percent chance of reaching 90, so after stashing the money in a safe place, either a money market or cds, for a year, she needs a planner to help put this somewhere it will make some decent interest. If the money is currently in roth IRA's though she needs to do this sooner. She can roll it over into a roth IRA in her name and pay no taxes on the interest it continues to earn. I think you have a limited time to carry out the rollover though, so you should find out what the money is in currently.

Drew

clh2
03-18-2008, 09:28 PM
Absolutely get her to see a fee-only financial planner. Get some good recommendations from other people you know,

Financial planners are not cheap. The hourly charge for our financial planner makes me go:scared1: But it truly is some of the best money we spend every year.

You've been given some good points to consider...especially that at 60, the money might have to last a long time yet.