Question by Pete: How to deal with proceeds from a house sale?
My father just sold his home and moved into a retirement home.
He needs about $ 3,500 per month. He receives $ 900 in social security so he would need to draw out $ 2,600 per month.
He just received a small 6 figure amount from the house sale. His only asset and hopes to live at least 5 years at the care home (he is 85).
What do I do with that money? just put it into CD’s or buy an annuity?
I’m being told by one company that I should put it all in an annuity that will pay him the $ 2,600 but would not earn any interest.
The benefit would be that if his health declined and he was placed in a nursing home, that money would be protected for his heirs and he would use medi-cal for the nursing home.
I just want to stick it in the bank, earn him some interest and hope he stays healthy until it runs out.
What to do?
Answer by PepsiLime
Be very careful with investing in an annuity, some are almost legal scams with the terms that they have. Check out with a financial attorney the terms of the annuity if that’s the way you decide to go. You know that the money will be in the bank if your dad needs or wants it. Will he be able to touch the annuity money without penalty if he needs/wants it? You could try doing laddered CD’s with a bank where the money he has would be in CD’s with different maturity dates, some in 6 months, some in 1 year, some 18 months, etc.
Add your own answer in the comments!