Questions for a financial advisor? My grandmother is 85 and.?
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Answer:
Since your grandmother is 85, annuities would not make sense unless she has a very very long life expectancy. Variable annuities would be too expensive relative to just investing her money herself and risky given her age. Fixed annuities (where you pay a lump sum and the insurance co pays you a fixed monthly amount) wouldn't make sense because she may not live long enough to make back her principal. She probably has very low income taxes and any tax benefits afforded by the annuity would be eaten up by fees and premiums.
If she is worried about her net worth being "sucked up" by a nursing home, she might want to buy long term care insurance (although at her age it will be very expensive) or gifting some of her wealth away to a trust for her family.
annuity? If you are to try these investments I suggest not putting all your grannie's money in it. some are variables meaning there are no guaranteed rate of income and it can lose money too.
you'd have evrything you need to know about annuities from this page
http://www.iii.org/individuals/annuities...
but i suggest since she is already 85 to put it in a bank and diversify her funds categorize them according to the following:
funds needed monthly
emergency/ contingency funds in case of hospitalization, can be in a time deposit account for easy pull out
funds that can be invested long term but can also be pulled out immediately just in case.
for her protection FDIC has set primary insurance limits to an account holder, if the insurance is at $10,000 do not put more than $10,000 in that bank or there is a great chance that if it exceeds $10,000 and the bank is declared bankrupt, $10,000 can readily be claimed, but the excess you would have to wait until FDIC liquidates the bank assets and divide the proceeds to the account holders and creditors.
or if you favor annuity I suggest not putting it in just one fund manager, diversify. divide it in several fund managers, it may lower income but it also lowers your risk.
A fixed immediate annuity MAY be appropriate. She can choose to have monthly payments from a lump sum of money paid out for a period certain (5, 10, 15, yrs etc) so she would recoup all principal plus interest and if she were to pass before the period is over, the payments would continue to a beneficiary. The biggest benefit would be that, at least here in Oregon, it is COMPLETELY PROTECTED from creditors, lawsuits, and nursing home situations as this money is "off the map". It may have different laws were you live though, so be careful. Your advisor may not be all wrong, but nail down the real benefits for you grandmother, not just the benefit of the advisors pocket.
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