Financial Advisor Asks About Elderly Couple's Assets?

Willard is a financial advisor who needs help with how to restructure the assets for an 80-year couple that are clients of his.

QUESTION: Willard is a financial advisor and has a client he wants to ask about.  An 80-year-old couple has a paid-for home worth $160,000, $54,000 in cash, $50,000 in savings, $5,000 in checking, and a $30,000 annuity.  They receive military benefits, two pensions, and Social Security income.  How should they restructure their assets?

ANSWER: If they have enough money to live on, the first thing you should do for them is set up a major emergency fund because there is a lot of potential for emergency with elderly people.

You should roll the fixed annuity to a variable annuity in good growth stock mutual funds.  Keep it in the annuity though so they can bypass the probate for estate planning purposes. 

The question they need to answer is: who is this money for?  They should invest it for their heirs in good growth stock mutual funds.  They should not be saving it in CD, which doesn’t even meet the rate of inflation.  If they don’t want to take the risk with mutual funds, then just leave it in a money market. 

Don’t restructure these assets based on their age, but on their goals with the money.