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Retiree investment 101??

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aili
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Retiree investment 101??  Reply with quote  

My husband and I recently retired, having lived in Europe for many years. We have an adult daughter with learning disabilities who is not able to live independently. We came back to the US as we have family here.

We are only getting about $4000/month from our European social security payments. In addition we purchased our home here in the US with cash back in 2011 - so no mortgage. We have approximately $1.5 million in savings which we will have to transfer to the US in the near future, out of our reference currency, due to the IRS' FBAR and FATCA demands.

We always lived off our salaries, while saving money, and are financial innocents! I worked for 10 years in a "financial services company" where I was able to watch as our clients went broke... little clients robbed to top up the accounts of big clients and ensure they didn't pull out. That, combined with the Wall Street meltdown, makes me want to sew the money into a mattress! But, obviously, we need to invest in SOMETHING - it isn't with the non-existent interest that we will protect our nest-egg and provide for our future and our daughter's. And obviously, we have SUCKER tattooed on our foreheads.

Can anybody give financial advice 101 on what we should do to ensure our money stays safe and hopefully makes us a bit of money to top up our social security payments? Thanks!
Post Wed Jun 26, 2013 12:30 am
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Radix3d
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Well, I probably wouldn't have bought a home with cash if I were you, simply because it's so cheap right now to borrow money right now. If you invested that money you stand a good chance of making more off your investment than you'd pay the bank for the loan. But that is just my opinion. You could still buy some rental properties to get some income.

I would also put a significant portion of that money in an index/ETF which is basically a diversified basket of stocks. You don't have to invest in just one, you can invest in the U.S. and emerging markets. Don't fear the stock market. As a whole, the stock market is incredibly resilient. And if you diversify into different markets you will wont have to worry about your losers.

That's what I personally would do with the majority of your money. The remainder I'd keep in cash, bonds with a short maturity, maybe even a small amount say 1% or less in precious metals.
Post Wed Jun 26, 2013 2:33 am
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coaster
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$4000 a month from European Social Security!?! Holy cow....the average US Social Security payment is under $1300 a month.

There are any number of solid, blue-chip major corporations paying dividend yields north of three percent these days.

~Tim~
Post Wed Jun 26, 2013 4:58 am
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aili
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Hi, Thanks for the replies. We had to buy our house cash (and everything else in cash, too) because we didn't have a credit rating as we had been living abroad.

We have had banks (Wells Fargo and Chase) where we have checking and savings accounts contacting us to try to get us to invest our nest egg with them, but my faith in banks is pretty limited. We are totally unfamiliar with other organizations - Charles Schwab, Edward Jones... where would you guys go to find an independent, objective adviser on how to proceed? I realize independent and objective are the hardest things to find!
Post Wed Jun 26, 2013 10:33 pm
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Radix3d
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Don't go to Edward Jones or some place like that. They will get the job done but why pay their fees? There are plenty of people on the forums, including financial advisors, that can help you. Spend a week or two doing research. A good two weeks of reading and you will know enough to make your own investment decisions and you will save thousands in the process.

I would start with getting this book. I don't agree with many of his conclusions, BUT his advice on how to invest is dead on. It's a very small book, any bookstore will have it, and you can read it in one afternoon: The Elements of Investing by Burton Malkiel

Investing is really about as simple as turning on autopilot now days. Just ask questions.
Post Thu Jun 27, 2013 4:13 am
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Radix3d
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Consider something like this for a PORTION of your money:

https://personal.vanguard.com/us/FundsSnapshot?FundId=0085&FundIntExt=INT
Post Thu Jun 27, 2013 4:21 am
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coaster
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quote:
Originally posted by aili
where would you guys go to find an independent, objective adviser on how to proceed? I realize independent and objective are the hardest things to find!

So find an advisor whose income does not depend on your following his advice. Find a fee-only advisor. Notice I didn't say fee-based, I said fee-only. Ask around among other wealthy people you may know and whose opinions you respect.

Also, check out this non-profit organization: www.napfa.org

~Tim~
Post Thu Jun 27, 2013 5:27 am
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clydewolf
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Re: Retiree investment 101??  Reply with quote  

quote:
Originally posted by aili

Can anybody give financial advice 101 on what we should do to ensure our money stays safe and hopefully makes us a bit of money to top up our social security payments? Thanks!

I can give you one recommendation, get a copy of the "Sound Mind Investing Handbook" by Austin Pryor. Your local library may have it, ask.

The book covers all aspects of finances. It is available from Amazon: http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Dstripbooks&field-keywords=Austin%20pryor
Post Fri Jun 28, 2013 11:48 pm
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Anton Martin
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Yes having financial advisor to mange your investments and planning your investments strategis make lot of sense. Initially you need to find right, experience, certified financial planner to look after your financial portfolio. Also do your own research to make right financial decisions.
Post Mon Jul 01, 2013 10:39 am
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littleroc02us
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Yes 4k a month from social security is a blessing for you, I looked at the irs.gov calculator and I believe I'll only get $1,800 a month so you've found gold. You are doing quite well. Where did you buy your home? The reason I ask is that your post is coming off as you not thinking your networth is much based on where you live. 4k a month if you live in NYC isn't much, but 4k in Phoenix is a lot of money when you have no mortgage and 1.5 saved.

Since you have a child who will need longterm help have you considered a trust fund that assist in their needs once you pass? After you've set aside monies for that priority, then depending on your age (which I didn't see) I would invest 30% of your investments in a Vanguard Index fund that is a 30/70 mix (heavy on the bonds). But if let's say your under 70, I'd up that stock mix to around 60/40 or so.

with 4k a month in steady income there should be no need to touch your investments almost never.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Jul 01, 2013 3:24 pm
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aili
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Thanks for all the replies! The home we bought is in Austin (which currently has a booming economy - who knows if that will last?) We paid $615K when we bought a spec home that was being built in summer of 2011 (during a lull in the real estate market - as far as we can tell, we got a great deal as the builder we bought from is currently selling the same model for about $725K). We are adding a pool which all the real estate agents say is a bad thing to do investment-wise, but we figure the $60K cost of the pool would increase the house's value to some degree - especially in Austin's awful heat! And all the other neighbors have pools, so it would almost look odd not to have one.

We are 64 and with "old age" reduction + homesteading, we're still getting hit with $16K/year in property taxes - so that eats a way at our social security payments!

Is Charles Schwab a firm worth looking into or do they eat up any potential with their fees?
Post Mon Jul 01, 2013 3:35 pm
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littleroc02us
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Isn't that interesting because your property taxes are so high and your home is paid off you'll still be house poor. I guess that's the zinger for buying such a beautiful home. IMO, you'll need to either pick up some extra work or figure out an investment strategy with your 1.5 million to both care for your child and help to supplement your retirement.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Jul 01, 2013 4:47 pm
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Radix3d
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quote:
Originally posted by aili
Is Charles Schwab a firm worth looking into or do they eat up any potential with their fees?


Mam, I would call Vanguard and ask them to assist you with your retirement plans. They have their own financial advisors and they will generally offer that advice for free or at low cost. More importantly they probably offer the best solutions.

https://personal.vanguard.com/us/whatweoffer/advice/financialplanningservices

800-547-3332

Do your own homework too. Personally I think it's the most important decision you're going to make the rest of your life you want to be as informed as possible. What else is more important of your time?
Post Fri Jul 05, 2013 3:27 am
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JonCartoon
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if you want your money will work for you.
you can investing in shares new company from Canada, they fast moving top
Post Thu Jun 19, 2014 11:05 am
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