Anonymous
Post 11/21/2012 22:21     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
If the $100K you say was put into an IRA was transferred to an inherited IRA, then it is in the name of the beneficiary. And if it was your husband who lost his parent(s), he is the beneficiary, not you. Of course you will benefit once the distribution is made, but the distribution will be based on his life span and is really intended for him.
Anonymous
Post 11/21/2012 22:15     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
When my mother passed away after a short illness, my sister in law was way too excited to do research on investments etc related to my brother's inheritance. It creeped us all out, including my brother. I've lost both my parents, so I inherited some money. Had my husband been quick to talk about what to do with "our" money, it would have been very off putting. Money that comes to you because you have this tremendous loss can have some hard emotions attached to it. You should be letting your husband tell you what his priorities are, or letting him alone if he's not ready to focus on it.
Anonymous
Post 11/21/2012 20:35     Subject: All you rich folks - looks like I'm (almost) one of you. What should we do?
Thanks also for the Bogleheads recommendation. I'll look into it.
Anonymous
Post 11/21/2012 20:34     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
Anonymous wrote:OP, did you inherit or did your husband? It matters, because inheritance is not marital property unless commingled. So, if this is your husband's money, you probably don't want to be making a lot of plans with it. Your husband needs to consider his own under funded retirement before anything else. I'm also confused that you live in DC in a $150K house, where would you find such a thing in this area?


I'm quite surprised by this. I understand the rules about inheritance, but I'm not "making plans" in isolation! We're married. We make major financial decisions together. That said, it is me, not my husband who takes care of our finances on a day to day basis, I pay the bills, I do the taxes, I do the research about major expenses or investments. I also currently bring in about 80 percent of our income. We are joint owners on all of our accounts. Likewise, it is "our" retirement even if the balances of the accounts are not even.

I said that we have about $150k remaining on our mortgage, not that we live in a house worth that much.

Anyway, thank you to the PP who outlined what a financial advisor would do. Can anyone tell me how they typically charge? Is it by the hour? Or a flat fee? If a flat fee, what range are we looking at?

Also, can anyone shed light on whether it might make sense to make this year's IRA contribution into a Roth rather than our traditional IRA? Our tax burden (for various reasons) will be fairly low for 2012 so the tax benefits of funding a traditional IRA might be fairly low. I need do some research on this before April 2013.
Anonymous
Post 11/21/2012 15:39     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
OP, did you inherit or did your husband? It matters, because inheritance is not marital property unless commingled. So, if this is your husband's money, you probably don't want to be making a lot of plans with it. Your husband needs to consider his own under funded retirement before anything else.
Anonymous
Post 11/21/2012 15:37     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
OP, did you inherit or did your husband? It matters, because inheritance is not marital property unless commingled. So, if this is your husband's money, you probably don't want to be making a lot of plans with it. Your husband needs to consider his own under funded retirement before anything else. I'm also confused that you live in DC in a $150K house, where would you find such a thing in this area?
Anonymous
Post 11/21/2012 13:20     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
Anonymous wrote:Discuss paying off your mortgage with the financial adviser. Ours recommended that we pay off our mortgage. It all depends on the particularities of your situation.


I agree. We did have 3X salary saved at 45 for retirement, so we went ahead and paid off our mortgage from excess cash flow.
Anonymous
Post 11/21/2012 13:19     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
Anonymous wrote:Don't rush into anything. Many people in a situation like yours feel pressured to make big decisions before they've had a chance to process how life will be different. It takes time & reflection to understand how you can make the most of your inheritance. By all means, speak to a Financial Advisor to make sure that you have no vulnerabilities (e.g., lack of insurance) but don't allow others to pressure you to "put that money to work".


I agree, give yourself at least 6 months.
Anonymous
Post 11/21/2012 11:11     Subject: All you rich folks - looks like I'm (almost) one of you. What should we do?
A famous man once said, plastics
Anonymous
Post 11/21/2012 10:59     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
Anonymous wrote:As some advisers would say, you have downside and upside to think about. First the downside:

1. Make sure that you have enough life insurance
2. Consider putting at least a basic will in place. You might need more than that in light of your increased amount of assets, but you should have at least something basic in place. My husband and I went to Anthony Carducci (888-628-2220 or call him on his cell at 410-693-7323). He explained all of our options to us and let us decide what we wanted to do. We never felt pressured into making a decision. He also worked around our busy schedule by coming to our house on a Saturday.
3. I am not sure how old you are, but if you are in your 40s or older you might consider a long-term care insurance rider to your insurance plan.


Your upside:

1. You want to try to grow these assets without taking a ton of risk. Talk to a good financial adviser. Call James Dunn (703-394-1913) or you could call Chris Brown at 202-364-1671. Both are a good guys and will steer you on the right path.
2. Consider putting a plan in place to take care of your kids education. That might be a 529 plan or something else that allows you to handle those costs at the time.
3. Talk to a good accountant about any tax ramifications of this inheritance (Call Chick Becker at 301-941-8090).


Nice try, Anthony! You seem to be very desperate to have to fish for clients on DCUM.
Anonymous
Post 11/21/2012 06:18     Subject: All you rich folks - looks like I'm (almost) one of you. What should we do?
I second the bogleheads recommendation. Personally I wouldn't bother with a financial advisor - waste of money if you are at all financially savvy.

Paying off some of the mortgage is certainly not a "stupid" idea. If you are risk averse it is probably the highest very safe rate of return you can get.
Anonymous
Post 11/21/2012 05:55     Subject: All you rich folks - looks like I'm (almost) one of you. What should we do?
If you google "how to invest inheritance," you will find plenty of lists and articles. I saw one by Consumer Reports that looks good. Similar to advice you see here.

Since it sounds like you are pretty responsible and stable people without much debt, I think you could handle this without a financial advisor. Your financial picture is not complex.

Max out your 401k, both your IRAs, and drop some in your kids' 529 plans. Then put the rest in a stable Vanguard fund. Use that Vanguard fund to max out your IRAs in future years, and just let the rest sit there for when you need it. Make sure you also have an emergency fund. All that will take care of the money and really help boost your savings.

Post this same question on bogleheads.com, and you will get tons of detailed advice that may even be better than a financial advisor's.

Sorry for your loss.
Anonymous
Post 11/21/2012 02:03     Subject: Re:All you rich folks - looks like I'm (almost) one of you. What should we do?
Anonymous wrote:Don't rush into anything. Many people in a situation like yours feel pressured to make big decisions before they've had a chance to process how life will be different. It takes time & reflection to understand how you can make the most of your inheritance. By all means, speak to a Financial Advisor to make sure that you have no vulnerabilities (e.g., lack of insurance) but don't allow others to pressure you to "put that money to work".


+1. A good rule of thumb is to wait 6 months to a year before making a major decision with money after inheriting it. Put it in a FDIC-insured savings account and give yourselves time to grieve over your loss and do research on your options.
Anonymous
Post 11/21/2012 01:58     Subject: All you rich folks - looks like I'm (almost) one of you. What should we do?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:You should both be maxing out 401ks


That is not a helpful contribution to this discussion. And if you don't know why, just stay out of it from now on.
.

I am not Ther person who wrote the above, but could you explain why they now wouldn't be maxing out their 401k's assuming they hadn't had the financial ability before? What am I missing?


PPs, OP says she is already maxing out her 401K and her DH does not have access to one but is contributing some to IRA.
Anonymous
Post 11/20/2012 23:05     Subject: All you rich folks - looks like I'm (almost) one of you. What should we do?
Anonymous wrote:
Anonymous wrote:You should both be maxing out 401ks


That is not a helpful contribution to this discussion. And if you don't know why, just stay out of it from now on.
.

I am not Ther person who wrote the above, but could you explain why they now wouldn't be maxing out their 401k's assuming they hadn't had the financial ability before? What am I missing?