Received approx. 450,000.00 life insur.benefit and need advice on best way to allocate in financial investments. I am employed and plan to work until I am 65. My husband had 401k. Of 92000.00 which fidelity moved to a beneficiary acct. It is active and I am leaving it for know until I get a better handle on what I will do with 450,000.00. I considered online banking thru ally for better return. I have a mortgage for 10 years at 4% 129,000.00. Which I am comfortable with. Bank or credit union? Do I want to utilize investment company for higher risk investments? I am located in delta ohio
Terry Says: This is a nice problem to have — and I wouldn’at rush to make any investment decisions. But you don’t want to leave all that money in the bank while you get a handle on your decision. I would suggest going to www.TreasuryDirect.gov, click on “individual” and then click on Buy U.S. Treasury securities. It will show you how to transfer at least half of this money into 90 or 180-day Treasury bills, which are safe and a direct IOU of the Federal government.
Then you need to slowly start doing a little research into investments, and investment advisors. (If you will email me directly at Terry@TerrySavage.com, I will try to point you in the right direction.) But there is no real rush to BUY anything, and there is nothing wrong with sitting in “cash” or Treasuries until you are completely comfortable with the decision. In fact, the first place I would start asking is at Fidelity or T. Rowe Price. Ask to talk to one of their Certified Financial Planners about your entire situation. It’s more than just investing this money. Now you need an “estate plan” — a will or better a revocable living trust, and a healthcare power of attorney. And you didn’t mention anything about your OWN retirement assets, from your own job. You’ll need to consider all of that as you work out an investment plan for your money — so that you aren’t taking too much risk, but you are getting enough exposure to the stockmarket to get some growth over the long run. (Plus, remember to change the beneficiary of your own retirement plan, now that your spouse has passed on.)
I know this looks like a daunting task, which is why I suggested leaving the bulk of your money in the bank or in Treasuries. Yes, I know it won’t earn much money, but it will be safe, giving you the freedom to decide whose advice you feel comfortable following. And don’t hestitate to write back to me. I know this must be a difficult time for you. But these decisions are important ones — and not to be rushed.