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<So I read the 13 Steps, Fool's Guide to Investing, Dow Dividend Approach, and I'm ready! The problem is that it's not my money... I'm helping a 59 year old unemployed ex-homemaker plan HER retirement, so the fear factor is crippling me.>

Well it should... . I am 59, have essentially no debts, a pension that pays about \$16000/year after income taxes,
but before about \$3200/year property tax. Fortunately I saved up all my life and have about 10x the amount the ex-homemaker has, so I can afford to worry less. I can also collect social security sometime.

<Here's the scenario: after selling her house, paying off her debts, and purchasing an inexpensive new residence, she will have about \$65-70,000. She does not have any income, and her SS benefits will be in the lowest bracket if she collects at 62, and not much higher if she waits until 65. (The only decision I have been able to make so far is to completely disregard the SS money, and be happy when she has some 'extra' income coming in)>

My Quicken calculator says if she puts in \$65k @ 21%, retires now with \$5000/year social security, experiences 4% inflation, and is in the 15% tax bracket, and promises to die at age 100, she will get about \$12,778/year after taxes in today's dollars. That would probably pinch. Also, while the Foolish Four may attain 21% annually, I would not want to make any short-term bets on it.

<I am encouraging her to try to work for at least 1-3 years in an attempt to allow her money to grow a bit, but I'm not sure how feasable that will be.>

Repeating those calculations, assuming 3 years more work, investing \$1000/year, gives \$17655/year, which might be
better.

<So the question is, given that her 'plan' was to spend the money as needed and then go on SSI (whoa!), do I just encourage her to invest (Foolish Four, small-cap growth? or WHAT!) and hope that things continue on the upswing, with the worst case scenario being that she ends up on SSI earlier than she expected? I have considered just doing the S&P 500 Index Fund, but I'm afraid it won't generate enough to give her an income and increase her principal; her living expenses, with no frills and no emergencies will be about 10K/year.>

If the index fund does 10.5% a year, she will get \$8545 and \$9495, respectively, for the two cases above, if I calculated correctly.

<In the meantime, just after I found this website, she and I went to see a 'financial planner' HA! He wants to see some (how predictable) diversification - from CD's to mutual funds to small-cap growth, but still anticipates only about 10.25% return! So now I have to talk her out of that...>

I am SO glad I am not a financial advisor to anyone but myself. She will have to balance a low-risk investment that looks sure to be insufficient vs. a high risk one that could well be better, but might be worse. How would you feel if, following your advice, she lost most of her capital? How would she feel? Betrayed?

<I'm also wondering, since she has no interest in managing her own money, what are some ways I could help her without taking away her control? Any reading recommendations?

I'd love to see her become financially independant; any guidance you can offer is greatly appreciated.>

You better not take away her control. You might end up with a serious legal liability if you end up in the role of a financial advisor, practicing without the required licenses.