Worried about mom
Keith is worried about his mom's savings and investments. Dave doesn't think there's a reason for concern. He believes she can go ahead and pay off her mortgage, too.
QUESTION: Keith is concerned about his mom’s savings and investments. He wonders, also, if she should pay off her mortgage. After hearing the details, Dave doesn’t think there’s much reason for Keith to worry about her situation.
ANSWER: I would recommend she go ahead a pay off the mortgage. If she can do that at age 75, and still have $430,000 left, that’s the way to go.
Being in the stock market at her age sounds like a shock to you. I don’t think it’s a bad thing. It’s just not what the typical financial planner tells you to do. For the most part, they’ll tell you to get super conservative with your money as you get older. But she’s not going to use this money; she’s going to use the income from this money. The money’s going to be left alone. If she’s in good mutual funds, and not single stocks, I’m not worried.
Let’s pay off the mortgage, and then she can start taking her income off the remainder. She won’t need as much in terms of income, because she won’t be sending money to the bank to pay the note on the house anymore. I’m comfortable with that.
I’m 58, and I’m 100 percent into stocks through mutual funds. I don’t have anything else, and I don’t ever plan on changing that.