No announcement yet.

Post-retirement investing

  • Filter
  • Time
  • Show
Clear All
new posts

  • Post-retirement investing

    Weird question,

    My grandfather recently passed, and my grandmother, who is 78, essentially received $25,000.

    Would it make any sense at all to invest this money into a Roth IRA? She isn't exactly retired, as she still works part time. My understanding is she could use it like a savings account wherein she could always withdraw from it if she needs it, but it would appreciate better than just a bank savings account and help come tax time. Her heirs do not need any money after she passes, so I only care about this investment from her viewpoint. That said, is it even worth the hassle of opening a Roth?

    We were also going to set her up with a reverse mortgage, so that she will be mortgage free.

    Thanks for the advice.

  • #2
    What does she plan to use the money for? It would depend upon how she invests it as to whether it appreciates better than a savings account. A Roth IRA is merely the container, not the investment vehicle. It can grow or shrink.
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


    • #3
      You can only put earned income into a Roth IRA. I kind of doubt your 78 year old grandma has earned income.

      Be very careful with a reverse mortgage. There may be much better options out there for her, some but not all of which involve selling the house.

      For instance the heirs of the house can function as the reverse mortgage lender.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011


      • #4
        Thank you for your replies:

        That is a good point about trying to figure out the best investments to make. I was just working off the assumption that it would have about a 4% return.

        She still works part time, so she does have earned income to invest, while replacing the invested income with money from the $25,000.

        What are some of the risks of a reverse mortgage, if the heirs aren't interested in profit from the house?

        Thank you!


        • #5
          I don't think it's so much of a risky thing as it is an expensive thing that is complex to analyze and determine if it is the best deal. It's like mixing an annuity with a mortgage. You need a degree in actuarial science to know how bad of a deal you are getting. You know you're losing money on average like with any insurance product, but it's hard to say just how much you're paying for the guaranteed monthly income and the guarantee that you can stay in the house indefinitely.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011