[USER]

My mom 68yrs old just received 3mln in Cash and $800000 in various stocks all in Fidelity.

She doesn’t have any retirement accounts. She would like ~$8000 a month for expenses. House is paid off, no debts.

She is talking with a Fidelity advisor who is offering either annuities or managed funds and wants to charge 0.75% annually for his services.

He hasn’t send any written proposal and she doesn’t remember the names of the funds and annuities.

What would you recommend to invest in if it was your mom considering tax implications as well?

Thank you in advance

[Frank]

Do not use Fidelity as your advisor. They are conflicted and their job is to sell Fidelity products, particularly ones with high commissions.

Fidelity as a custodian to hold the assets is a fine choice.

You mother is grossly over-saved now and her situation is not hard to plan for.

In fact, it is the kind of situation that attracts financial vultures seeking to prey on her.

She should get an independent financial advisor who charges by the plan or by the hour and pay up to 10K for a comprehensive plan.

She can leave the cash in a money market at Fidelity for the moment.

[Tola]

Get a financial coach and she should spend more than 8k a month and enjoy life and her current avatar.

I swear by the FI Woman. She’s amazing.

[Mark]

HELL, NO to annuities….and run away from anyone pushing them.
The simplest and safest is Schwab Intelligent Income.

Go to a local Schwab office or just can them.
Congratulations. Set it up once, relax and enjoy the blessing.

[Scott]

I would engage a financial planner. It’s fine to hold this temporarily in cash (short term investments). Fidelity has good services but not really a fulsome planner.

She needs a plan not products which covers things like estate planing, LTC, taxes etc.

If mom is not financially sophisticated and assuming she is in average health etc philosophically a lifetime annuity isn’t the worst idea.

Taking the $8k/month as given a 68 year old female could get lifetime annuity for that amount for about $1.2m or about 1/3 of the bequest, which covers her needs for life, and still have well over $2m left for other wants and needs.

[Chris]

Lots of great advice. Additionally, I would recommend that you talk to an elder attorney to protect her assets in the case that she needs long term care.

[Bill]

.75% of that is $28k per year. That’s before all the internal fees of what he is pitching.

Anyway, this is why I kinda hate fidelity even if there website is better. At their core, they are a sales company and do not look after the interests of their clients.

Anyway, if she just put it all in a money market fund, she would have $12k per month in just interest.

Any sort of reasonable portfolio is likely to double or that over time, but would be taking on some risk.

She’s got waaaaay more money than she needs for that sort of spending goal, so it’s really a matter of how aggressive she wants to be in terms of passing some of this on to future generations.

[Bella]

Right now even if she puts it in HISA she can net 12000 a month. The apys are around 4.5%.

[Tenille]

With that amount of money, please invest in an advice only CFP. They would provide advice on her financial strategy as well as tax management.

They charge a flat fee for the advice and the client just executes the changes.

It will be money well spent.

[Sandipan]

the 4% rule indicates that she will be able to withdraw $150k ish annually without too much worry about running out of cash in her lifetime.

her need for $96k annually is about 2.5%.

no to annuities and managed funds as they will make her advisor rich, at her expense.

index etfs that track the S&P, world index and bond shd be the low-risk and pratical way to go about this.

[Kristi]

Id get a fiduciary and come up with a plan. Personally if it was me, I’d put 2 years worth in Vanguard money market and do a blend of SCHD or VYM, VOO or VTSAX.

[Alyson]

Additionally she should speak with estate planning attorney & CPA to set up trust and tax plan.

[Darlene]

Don’t pay a financial adviser. I did and they did not advise what was best for me.

[Robert]

Talk to a financial planner and estate planner but don’t do an annuity.

[Sam]

I would put 2 million in the sp500 over the next 3 months, would keep 1mil in a money market.

This would last 13 years with a 4% APY, obviously expenses will move up but this would give the other 2.8mil 13 years to grow.

Then just withdraw from there.

[Rick]

With 3.8 million $8000 a month will last her till she’s 108 years old with no interest.

Put it in the safest bonds and high yield savings and go fishing.

[Author]

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