Retirement Investment

Terry, my wife and I are trying to determine what to do with about 55K which has become available. The money is cash and I wanted to increase our existing savings account to 50K, for emergencies and unforeseen expenses, using 25K of the previously mentioned 55K, leaving 35K. I wanted to take the remaining 35K and invest in a low risk fund with a mix of stocks and bonds. Our timeline for this investment is 5-10 years as we are both 60 and I would like to add this to our portfolio of 401Ks (2) and defined plan pensions (2). Our plan today is to begin receiving our pensions when we are 65, I would begin to collect Social Security at 66. my wife would begin to collect Social Security at 70,and at 70 we would also begin to draw down our 401K by 4% per year. We are looking for something with tax benefits while the money is invested (no paying taxes on any gains over the 5-10 years) and then begin to withdraw from this account at 70 as well.

My wife would rather take the 55K and pay down our mortgage, we have a balance of about 100K. We expect to continue to live in this home for 4-5 years.

Your thoughts?  Thanks

Terry Says:  So what you really want is an analysis of your financial plan — without any knowledge of  how much money you have saved — both inside retirement plans and outside — and how your portfolio is invested, and how much money you will get in pensions!   And you want to pay no taxes on the gains you will get from your investment — even though it will not be tax-deferred in an IRA!

I think instead I will refer you to a Certified Financial Planner who will work with you on your entire situation — including things like estate planning, insurance, long term care insurance, how/when you should each take Social Security — and will have all the details to give you the specific information you need.  Go to either www.CFPBoard.org, or www. FeeOnly.org, or www.PlannerSearch.org.   And read my recent column on choosing a financial planner.