There is really good info in some of these posts.
Let’s change it up a little. You are retired with social security a small retirement that will run out soon. And you have medicare, or Medicaid, I don’t know the difference.
How does that change things? So basically you have 800k and need to invest it so you can live with no job and no other income.
BTW. I’m 45. This is for information only. Im not a financial guy, so I’m just curious how some of y’all would handle this situation.
quote:Relocate to Colorado and open a cannabis dispensary,go fly fishing and skiing.
Originally posted by Fishb8Let’s say you had a long lost uncle that left you a million dollars. After taxes and fees, you walk away with 800k.
You are not retired but getting close. You own everything but you have zero money saved for retirement.What do you do with the 800k in order to retire.
And no this isn’t real, I wish. Just random talking after this last lottery winnings.
800K at a 4% return is 32K each year for the rest of your life…
Dear Fish…The new dynamics are fairly significant. #1 the person you are now describing…no job, very little savings, and scant medical coverage is someone who cannot afford to risk the $800K in the short term volatility of the stock market. The risk allocation must now be shifted to the bond and cash markets. I wouldn’t exit the stock market completely, but I would reduce the exposure to 20%. Invest $160K into a No Load Index Mutual Fund that replicates the broad market such as the Willshire 5000 index. This is an index of 5000 publicly traded US companies that range in size from big to small, and across all major stock market sectors…financial, technology, utilities, consumer durable’s,healthcare, etc. A one stop shop as it were…Let it GROW! Next invest $500k into a corporate bond ladder consisting of at least A rated companies with $100K into each of the 5 rungs. I’d start out with a maturity of 2 yrs on each bond for a total of 10 years.(2yr., 4yr.,6yr.,8yr.,10yr.) When the 2 yr. matures you reinvest in a 10 yr., and you continue to do that as each bond matures. A leap frog so to speak, and you spend the interest income for living expenses. If your bond ladder averages 5% yield, you’ll receive $25K a year income from the bonds. I would then invest $100K into US Treasury Inflation Adjusted bonds(TIPS)in a similar ladder using $20K for each rung at 2yr. maturity intervals. You’ll receive a lower yield on the TIPS because they are lower risk investments…Goverment Backed Securities…so figure approx. 2.5% avg. yield for $2500 a yr. in income. That’s $27,500 income from bonds, and you haven’t spent the principal. Withdraw 4% a yr. form the stock mutual fund for additional income if necessary, but lower that percentage during down markets, or just leave it alone altogether. With the remaining $40K shop around for affordable, quality long term care insurance, and Medicare Advantage health plans. Leave the remainder in a money market acct. for emergencies. There are other resources availab
Bossdog, seems you know what you are taking about.
We were talking about how a million cannot sustain much of a life anymore. So we started asking, if?
Also how much would say, me (married with 2 kids and 45yrs old), need in order to stop working and live comfortable?
Thanks for the replies.
quote:
Originally posted by Fishb8Bossdog, send you know what you are taking about.
We were talking about how a million cannot sustain much of a life anymore. So we started asking, if?
Also how much would say, me (married with 2 kids and 45yrs old), need in order to stop working and live comfortable?Thanks for the replies.
How much do you want to make per year in retirement, and how long do you plan to live after retirement? Then do some maths 
I don’t think of myself as a prepper but it would be nice to have a piece of property with house, paid off, that is totally able to be off the grid. Invest the rest in a good index fund.
Dear Fish…My number would be approx. $3 Million in cash. Of course I have no idea of what lifestyle you desire, your health issues, and what inflation is going to do to the value of a dollar. Based on the length of time that the Federal reserve has been pumping liquidity into the markets, and the escalation of the national debt it could get ugly quickly. we’re modest people with a “live below your means” approach to lifestyle. We don’t go out to eat hardly at all, and we enjoy doing things for recreation right here in SC. We buy cars 2 years old, and drive them for a dozen or more years. We pay cash for stuff, and we don’t own any credit cards. I get a haircut about once a month when I get a coupon in the mail, and if I buy new clothes they tend towards camouflage. We paid for our boys college education, but we required that they get a BS degree in 4 years to get the funding. We spent a small fortune on our boys growing up, but we planned for it. We took them on good vacations, sometimes one of us stayed behind because of work, and as long as they maintained their top 10% of class grades, we paid for their sports activities right through HS Varsity. That travel baseball was pricey, but great memories.
Sol Mate
Mako 20B
225 Optimax