Investing over 80 years old?
My parents just got a $300K refund from Allianz – from a deferred annuity con. Their advisor wants them to purchase a Liberty – TransAm annuity w 130K (party from another JH annuity that is mature, but I think that is bad advise given their ages: 81 and 86. They already have $300K tied up in other annuites right now (one matured, one matures 2010 and 2011), and have $80 in stocks/bonds/mmf. What is the best strategy for them? Would a 25% bond/25% stocks and 50% annuity stragey be a good idea?
Their advisor gets a fee when they sell an annuity, thus their pushing them to buy one. (Besides, by having one in the past, they look like they are likely to buy one.)
So they a total of $680K to work with and are 81 and 86. The 86 year old has a life expectancy of 7 more years and the 81 year old has 10. As optimists, let’s make that 15. If their living expenses are $45K per year, it won’t matter what you invest in as long as it doesn’t drop in value….
The annuity wouldn’t drop, but it’s really just a return of their money at first, so if they are in lousy health, it may not be a good idea. If they are very healthy, yeah, might be a good idea.
The bonds will probably drop in value (I expect interest rates to go up). The stocks will be a roller coaster.
Best Stocks to Buy – News 12 Interview with Marc Chaikin December 10th, 2011