Divorced, home sold, have $90,000 in a money market account. How should I invest? Currently renting. Work P/T.

Question

I am 61 yrs old, female empty nester. Should I buy or rent and how do I maximize my money? Seeking F/T job.

Answer 1

if you have no need for the money in the near future put 80K in no load mutual funds, be sure to select that has high yield. With 8-9% yield you will be able to withdraw 7K per year without reducing your initial investment. For emergency put 10K in MMA, find one that pays around 5 plus percent. Go to bankrate.com to find one. In one year you will be eligible for social security benefits. If you work full time you will lost you benefits if you make over 15K. Think of part time work only. Its best to rent, house will demand a lots of maintenance, it will add to your cost of living. Apply with your city or county for senior housing, very low rent and all are seniors and a good place to find a new mate. At age 62 my estimate is you will generate income around 2500-2700 per month

Answer 2

Although Dave Ramsey recommends nearly everyone have a home, I don't know that buying a home is necessarily the best thing you can do with your money. It might be if you are living in a market where the housing prices have been declining for awhile, although they are expected to continue declining in many markets. You may not want to have to take care of a house though if you are planning to live on your own. Renting is also a nice option if you are considering moving anytime soon. You are only 61, so you potentially have a lot of life left. Do you have any retirement money set away? That will make a difference on what you decide to do. If I were in your position, I would sit down and talk with several different financial advisors to get several different ideas. Then think about which ideas make the most sense to you and only do business with someone who makes you feel comfortable. Whatever you do, don't let someone talk you into getting some "sensational" deal where you are making a guaranteed more than say 6% interest on your money. In most cases, you won't want to take too many risks with your money--ie don't take out a mutual fund that is 90% stocks. Take a look at how much longer and harder you want to work. Do you want to work full-time right now? How much will social security cover for you? What kind of lifestyle do you want to have? All of these things need to be considered in order to make a proper investment decision.

Answer 3

You don't provide enough information about the rest of you conditions. Are you debt free? How about your credit card debt? Do you have an emergency fund? What are you currently living on?

If this money is extra, and you aren't using it to sustain your livelyhood, I think I woul tell you: 1. Money market rates are at 5%, terrible, so are short term CDs. 2. I would advise you to consider looking at Dave Ramsey's advice, buy his book, and read it. 3. Invest in a diversified portfolio of at least 4 funds. Look at the ten year averages on thse funds, and get something in the 9-12% range. a.International type fund, b. Income stock fund c. growth and income, d. may be a large cap growth fund.

Check with a (free consultation) broker that you can get from Daves web site. He has already screened many good ones for you. I use American Funds 800/421-0180. But there are other good mutual Fund advisers.

Answer 4

AT your age, I would not suggest even looking for full time work....most good jobs these days are being given to the younger generation, like it or not, whether you have more experience or not, the companies don't have to pay the younger people the top salaries they would be required to pay the experienced ones. I would look for part-time work.
As far as investing the money....FIND A GOOD BROKER company, or financial investor who you feel is REALLY ON YOUR SIDE, review the best long-term stocks and bonds acccounts and money market accounts...look at which ones would allow you to withdraw money without penalties in case of emergency, and then just pick 2 to 3 different funds, to see how they perform over the next year or two....remember that stock and bond and money market accounts are designed for the investor who will be able to leave the money invested for a good while, to allow the growth potential. In the past, I have used these,and been pleased with all of them: RBC Dain Rauscher, located in Richmond, VA, The Vanguard Accounts, at vanguard.com, and The American Funds, who handle my IRA account (one you DO NOT want to withdraw from before retirement age, or will be penalized, but boy, do you get the enjoyment of watching your balance grow each time you get their quarterly statement! I have their "new economy fund".....it faltered some after 9-11, but is making a fantastic comeback now.....that is the risk you take with any
investment in the stock and bond accounts....you have to "ride the tides" of the economic world, and pray for the best.

Answer 5

I would first recommend that you purchase a home. without knowing all of the details of your credit history, income, the prices of housing in your market, etc, so assuming that they are favorable (you have decent credit, you live in an area where you plan to be for awhile and can find a residence house/condo that is affordable -and you have enough income to make payments), you are much better off buying than renting. especially now, most real estate markets across the country have softened, so you are in a position where you can get a good deal, and once the markets rebound you'll be in a better position then, having bought now, than renting until then.
that being said, dont put all of your eggs (your $90k) in one basket (your home) - you'll want to keep a portion of your assets in a more liquid state, especially if you are working part-time now. at least 6 months (and probably 12 months until you find a full-time job) of expenses handy.
do you have health insurance, or medicare? you may or may have a plan at your future full-time job, so its something to get squared away sooner rather than later.
of course you probably are best off investing in something short term but low-risk - obviously a 401(k) isn't your best bet, since you're already at the age where you can draw from it, but perhaps mutual funds - otherwise, savings accounts are getting 5% these days, and it might be the best idea for you at your age with its liquidity.

Answer 6

If you can rent, that would be the best way for now. I would then get a $20,000 money market for emergency, (5) 10,000 cds (3) 5,000 cds (5) 1,000 cd for the shortest time.

Answer 7

buying could be ok... if you put 20% down, 15 year fixed rate mortgage.... I would be debt free before doing it.