Fidelity has advisory services for as low as 50,000. problem is their fees, but if you feel secure with one of their many portfolios ,at least get informationand decide if it is god for you/john

Yes, my disability income will cease at retirement age. I am unsure what my SS income will be, since most likely it will be through my former husband. I am estimating that it will increase by a few hundred dollars. Again, though, I can't say for sure at this point. I need to call social security to see if they can give me a more firm amount.

Thanks,

Dutchgirl

Well, this is one of my dilemmas. I don't know whether I should go with someone like Fidelity and use their online services, or take advantage of someone like Edward Jones to manage my account for me. I know the fees would be higher with the latter, but the rep from Edward Jones said, "You get what you pay for". I don't want to make the wrong decision, given my circumstances.

 Thank you.

If my math is right I figure if you want $600 a month/$7200 year then you will need to get at least 7.2% yield on your $100,000 and that is going to be hard to do and keep your money safe. If $100,000 is all I had then I would only put it in something real safe like CD's from banks and that is going to be hard to do at this time. You can go to Fidelity. com and look at their fixed income area to see what CD's are running now.

If you do look at CD's then maybe think about puting a third in a one year, third in a two year and third in a three year so that way you will not lock all your money in for a long time in case interest rates go back up in future.

Sorry I could not help you more.

Copie

Copie, thank you. What you're telling me is exactly what I need to know. The rep from Edward Jones wants to put me in an annuity that will guarantee income, but I'm not comfortable with annuities. It seems like all I hear are negative things about them.

Thanks again.

You are right to be leery of annuities however there is a certain type of annuity that is perfect for your situation.  It is a fixed income annuity or SPIA - single payment income annuity.  I ran a quick find on these based on your age and got a lifetime income of $587/month based on your $100,000.

If you  decide to go with a SPIA use a low cost provider which will probably not be Edward Jones.  Fidelity and Vanguard have them but there are others that may be better and you can get an immediate quote from here

You need to find out what happens to your SSDI.  Mine was the amount I would have received at 65 but since you may be collecting on your husband's, you may get a bump at either 62 or 65.  SS is incredibly helpful at figuring these things out and giving you numbers.

At 58, you need to look long and hard at inflation protection and figure out whether an inflation kicker is necessary and worth the decrease in current income.  A big factor in that is your life expectancy. Another factor to consider in this is the fact that interest rates are currently very low and that will permanently set the amount of money you will receive for your lifetime.  Another thing you might want to investigate is a reverse mortgage but again, be very careful here as there are a lot of sharks out there and high, high fees.  They are becoming increasingly popular and as more banks enter the arena there will be lower fees and better deals.  I vaguely remember reading about one that was "sponsored" by the government akin to a fannie mae mortgage but the details escape me.

Roberta 

Roberta,

I certainly appreciate the research you did for me, along with valuable information. I will look into the SPIA. Also, I did try to contact social security today, but never got through. Knowing the exact amount I will get at retirement will help me to make a more informed decision. Thanks so much.

 

Dutchgirl

You have received some excellent advice. I would make some additional suggestions.

First, without prying to much. Even though you are disabled, do you have the ability to do some part-time work? Social Security allows you to have some modest income ($640/month) and still collect disability payments. Even if you could work ten hours a week the income would help.

The suggestion for a SPIA (Single Premium Immediate Annuity) is a good one and you can use this site for low cost providers www.immediateannuities.com  Make sure it is that specific type. Be careful of  someone is trying to sell you Varaible Annuities, Indexed Annuities or other complex investments.

One thing to consider is that SPIAs are best utilized later in life (65-70) . This is because they are actuarial based, you will receive a higher payment the later you purchase it. Also, as someone said previously we are in a low interest environment which lowers the payment rate.

So consider lifecycle funds like Vanguard's Target Retirement funds, Fidelity Freedom funds, or T. Rowe Price Retirement funds. Then annuitize later after you start receiving your social security payments.

 Bill

 

Spirit Rider:

Even though you are disabled, do you have the ability to do some part-time work? Social Security allows you to have some modest income ($640/month) and still collect disability payments. Even if you could work ten hours a week the income would help.

I second this.  If you are in good enough shape to be able to find this site and type well-reasoned responses, you can be employed at least part time.  The issue is finding the job.

Dutchgirl,

I don't know if any of this will help, but here are two more sources of information for you:

Payout Funds Step into Pension Gap

(an article on Index Universe by Paul "pkcrafter" about creating an income stream),

and

VG Managed payout funds are here!!!

(a recent thread in the Investing During Retirement forum that talks some more about one of the options Paul mentions).

Best wishes to you,

Jan