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Old 09-19-2008, 08:27 AM
 
Location: North Cackelacky....in the hills.
19,556 posts, read 11,211,381 times
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Default $100,000 to invest and 73 years old....

What should my MIL be doing?

She has a 401k with roughly that much in it that needs to be rolled over as she has just retired.

She also has another $60,000 or so in various bank accounts.

Her bank was simply going to put it into a IRA so she doesn't have to pay tax on it but to be honest I can't really see the point,she IS 73 afterall,it might be getting time to actually USE the money to enjoy her life.

What about setting up a IRA to buy rental real estate and earning an income that way?
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Old 09-19-2008, 08:36 AM
 
Location: BOY-see
4,271 posts, read 6,353,737 times
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A couple of days ago, closed-end bond funds were at ridiculous discounts to NAV. Some people locked in relatively safe yields of 8% and more. But even now, you can still get some at good discounts, that would generate a decent income if she wants an income from it.
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Old 09-19-2008, 08:53 AM
 
Location: The Pacific NW.
701 posts, read 992,258 times
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Quote:
Originally Posted by oz in SC View Post
Her bank was simply going to put it into a IRA so she doesn't have to pay tax on it but to be honest I can't really see the point,she IS 73 afterall,it might be getting time to actually USE the money to enjoy her life.
Sure, but she probably doesn't want to pay tax on the entire amount at once, right? Roll it to an IRA, then she can take out what she needs, when she needs it, and keep the tax bill down.

If she were my MIL, I'd suggest putting much of her $60k (sitting in the bank accounts) into high-yield online savings or CD accounts, put most of the IRA money into bond funds, a little into REITs, and the rest of it into dividend-paying, relatively conservative stocks. This combo would provide an income stream, be very conservative, yet provide a little opportunity for growth too.

But your MIL's specific circumstances might require something different.
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Old 09-19-2008, 02:37 PM
 
Location: Northern California
3,468 posts, read 8,520,190 times
Reputation: 1445
Quote:
Originally Posted by oz in SC View Post
What should my MIL be doing?

She has a 401k with roughly that much in it that needs to be rolled over as she has just retired.

She also has another $60,000 or so in various bank accounts.

Her bank was simply going to put it into a IRA so she doesn't have to pay tax on it but to be honest I can't really see the point,she IS 73 afterall,it might be getting time to actually USE the money to enjoy her life.

What about setting up a IRA to buy rental real estate and earning an income that way?
Roll it over into an IRA. Your MIL will only be taxed on whatever she withdraws. It's better than having the whole $100K taxed. And does a 73 year old woman want to be a landlord and put up with that hassle?
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Old 09-23-2008, 03:37 AM
 
Location: USA
27 posts, read 47,737 times
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Quote:
Originally Posted by oz in SC View Post
What about setting up a IRA to buy rental real estate and earning an income that way?
Not a bad idea.

I think it is one of the best idea to buy property and use it for rental purpose to get a handful amount each n every month.
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Old 09-24-2008, 09:41 AM
 
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Whatever you do, remember she must take RMD's (required minimum distributions) on her IRA as she is older than 70 1/2.
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Old 09-25-2008, 07:44 PM
 
Location: Orlando
7,823 posts, read 6,491,547 times
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I have a couple of investors I work with what they have done is to buy some of this deepkly discounted property and rent it for a popsitrive cash flow. the returns are decent. Her is an example - buy for 35k, put 5k in it, it was previously sold for 171k easily worth 80-125k depending on how conservative. rent for the 2/2 unit will be $1000, mgmt at that is 100 so they get 900 - HOA - cost of 40k, or about $400 pos cash flow. and an appreciation which so far is at 20k and rising after 1 month. you do the math. I'm lucky being in Orlando because we always have a good demand for Real estate. but there are other places I suspect Vegas has some great deals too. It seems there are deals for all price ranges,
I know a property for 125k that is worth 225-250k and last sold for 285k rent about 1300-1500
There are the same sort of deals at 200k, 300k 500k and even 6M So my vote is on RE while it is being shorted its a great market for it.
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