Investing W/comp settlement funds
Hi Terry,
My husband is about to rec’e a large settlement from a worker comp injury. He wants to invest in our current home w/new siding and update the kitchen. I want him to invest for retirement. My husband will be 50 in a few months and I am 46. We both have 401k investments but started late. We both have pensions and have an additional property we rent out. What is the best way to invest the unexpected funds? Property or stocks?
Thank you,
Terry Says
OK, this is a windfall and you need to consider its use very carefully. My first suggestion is to put it in the bank in a money market deposit account —and promise yourselves not to withdraw even one penny for six months! That is the kind of disciple you need right from the start to deal with this money. If you can’t do that, then all my advice is useless. You will both dig in and start spending and it will be gone!
What you need now is to sit down with a trusted financial planner — I’ll help you find one –and sort out your goals. There are some basic questions to answer — and top on my mind (since this is workers comp) is whether your husband will be able to work in the future and bring in an income. And you’ll also want to consider how long you want to stay in the home, what really needs doing, and how expensive a remodel will be.
In fact, there needs to be a long discussion about your goals, your current financial picture, and a reality check on what retirement will cost.
Coming soon: A column about a new service that matches people like you with trusted, fee-only, verified competent financial planners. Keep watching my website for that column in the next week or so!
No rush on this since the money is going right into the bank!!!