Financial Advisor? at age 70? Why?

[UtahBill]

got a friend, her husband just died, life insurance of $200K, monthly income from SS and teacher retirement, so about $3K per month. There is very little in savings.

Her house is NOT paid for, and she needs to sell it and get one more suited to her age, a single level, smaller home near family.

She has been advised to get a financial planner.
I am concerned that the advisor will talk her into investing in the stock market.
at her age, about 70, she should not be risking her financial assets, or paying fees to have someone else manage her money.

It is very frustrating to me when elderly friends and neighbors ask my advice, then ignore it and get ripped off. Got one next door who let the Dealership replace her rack and pinion because it was leaking, altho there was not a single drop of anything on her garage floor. Another neighbor, old man, was about to be ripped off by AAA. They could not start his car and told him that it needed to be towed to AAA even tho it was under warranty by Toyota. They told him that it was probably the car's computer. They made an appointment with a towing company and the AAA guy left. I went over and started his car with jumper cables. LSS, he had left an interior light on for a long period of time, battery was very dead, and the AAA guy was using one of those portable jump starters that has a small battery, not up to the task. I had to run my truck while jumping his car to get it to start.

Back to the widow, she isn't much of a listener, interrupts others like she isn't even aware that they are talking. Still, I hate to see her end up losing a large chunk of what little she has left to unethical "advisors".

How do I convince her that she does NOT need a financial advisor? What do I tell her to watch out for when they meet and how to recognize when he starts giving her bad advice? I am thinking that I should be there with her, and will if she will let me.

 

[Lutherf]

I doubt that she will be advised to go into the market. It's much more likely that an annuity would be recommended and that's probably a good ida under the circumstances BUT she needs to make sure of what she's getting into because there are a whole lot of products on the market and not all of them are good. If her husband was military I'd recommend USAA.

 

[UtahBill]

I doubt that she will be advised to go into the market. It's much more likely that an annuity would be recommended and that's probably a good ida under the circumstances BUT she needs to make sure of what she's getting into because there are a whole lot of products on the market and not all of them are good. If her husband was military I'd recommend USAA.

He was a Vet and has USAA, but why an annuity when she already has guaranteed income from SS and teacher retirement? Seems to me that her first priority is a paid for house.

 

[Lutherf]

He was a Vet and has USAA, but why an annuity when she already has guaranteed income from SS and teacher retirement? Seems to me that her first priority is a paid for house.

You're right. I only half read the thing last night.

Getting into a smaller, low maintenance place is a good idea. Does she have any equity in her current house?

With $200k and, maybe, a little from the sale of her house she doesn't need full blown financial services...as long as she doesn't go on a spending spree.

 

[MaggieD]

got a friend, her husband just died, life insurance of $200K, monthly income from SS and teacher retirement, so about $3K per month. There is very little in savings.

Her house is NOT paid for, and she needs to sell it and get one more suited to her age, a single level, smaller home near family.

She has been advised to get a financial planner.
I am concerned that the advisor will talk her into investing in the stock market.
at her age, about 70, she should not be risking her financial assets, or paying fees to have someone else manage her money.

It is very frustrating to me when elderly friends and neighbors ask my advice, then ignore it and get ripped off. Got one next door who let the Dealership replace her rack and pinion because it was leaking, altho there was not a single drop of anything on her garage floor. Another neighbor, old man, was about to be ripped off by AAA. They could not start his car and told him that it needed to be towed to AAA even tho it was under warranty by Toyota. They told him that it was probably the car's computer. They made an appointment with a towing company and the AAA guy left. I went over and started his car with jumper cables. LSS, he had left an interior light on for a long period of time, battery was very dead, and the AAA guy was using one of those portable jump starters that has a small battery, not up to the task. I had to run my truck while jumping his car to get it to start.

Back to the widow, she isn't much of a listener, interrupts others like she isn't even aware that they are talking. Still, I hate to see her end up losing a large chunk of what little she has left to unethical "advisors".

How do I convince her that she does NOT need a financial advisor? What do I tell her to watch out for when they meet and how to recognize when he starts giving her bad advice? I am thinking that I should be there with her, and will if she will let me.

I think it'd be great if you went with her to the appointment. Don't show your prejudice. Just sit, listen and then ask questions. You'll get a complete picture of her financial position and be in an excellent position afterwards to critique the guy and give her some really good advice. You might say something like, "I know you're not too familiar with finances and such. How about I go along as an extra pair of ears? I might even learn something myself." (I hope she lets you.)

If she declines your generous offer, I'd advise her to do nothing when she goes there. To take the time to run the guy's ideas by others she knows. And that you'd be happy to be one of those people. She shouldn't be charged anything for the consultation, by the way.

I was sitting in a car dealership waiting for a routine oil change and ran into an older lady I knew also waiting for service. She said she was in for routine maintenance, too, on her two-year-old Buick. She had 23,000 country miles on it. The service technician came out, sat down next to her and told her she needed new brakes all around. Like $500, if I recall. I could tell she was being receptive and was about to agree, so I butted in and said, "23,000 miles in the middle of bum-**** nowhere and she needs new brakes on a 2-year-old car? That's absurd. If she does? The brakes were defective. Addie, I wouldn't pay for them." The guy was PO'd for sure. Couldn't miss it. But know what? They did it for nothing. Creeps.

Seniors are taken advantage of all the time. Day-in day-out. Very unfortunate. She's lucky to have a friend like you who's taking an interest.

And, by the way, don't assume the financial advisor is unethical. Most of them aren't. (He should be recommending conservative investments such as GNMA's designed to provide monthly income.)

 

[Goshin]

A good and ethical financial advisor probably wouldn't put her in the stock market just the now. I agree what she mainly needs is a paid-off house, and if it is two doors down from one of her children or grandchildren, or from a helpful younger relative of some sort, so much the better.

Of course, the future is an unknown... she might shock everybody and live another 25 years for all we know. Still 3k a month retirement money is pretty good, especially if the house is paid off... it's those darn medical and drug bills that get you.

 

[Helix]

the main argument for a financial advisor would be to arrange the money in a way that the health care industry won't get all of it. there's generally a five year lookback, so it's best to act early. moderately priced nursing homes cost upwards of five thousand a month, and Medicaid won't do **** about it until every last cent is drained. the elderly care industry is often a one hundred percent "death tax" if planning was poor.

 

[Fisher]

Since I occasionally sit on the few hundred bucks an hour side of the desk from older folks, I would suggest you have her decide what she wants before she walks in the door. Does she want to insure the money for herself or for her heirs--she will say both but she is to prioritize one over the other. It is a totally different conversation, especially when it comes to the house.

 

[MaggieD]

the main argument for a financial advisor would be to arrange the money in a way that the health care industry won't get all of it. there's generally a five year lookback, so it's best to act early. moderately priced nursing homes cost upwards of five thousand a month, and Medicaid won't do **** about it until every last cent is drained. the elderly care industry is often a one hundred percent "death tax" if planning was poor.

I absolutely HATE HATE HATE this philosophy. People save all of their lives for a rainy day. When it starts pouring, relatives don't want them to spend it. Ridiculous. People with your mindset want "the government" to pay. Pity your relatives who end up in these warehouses. Your advice is unethical.

It's their money. To spend to let them have the best life they can. Terrible advice.

 

[Helix]

I absolutely HATE HATE HATE this philosophy. People save all of their lives for a rainy day. When it starts pouring, relatives don't want them to spend it. Ridiculous. People with your mindset want "the government" to pay. Pity your relatives who end up in these warehouses. Your advice is unethical.

It's their money. To spend to let them have the best life they can. Terrible advice.

i think it's unethical for the health care industry to eat entire estates. we're the only first world country that does it this way. i've actually heard people say that they hoped they went quickly so they could actually leave their kids something. that isn't the American dream, and i'm unapologetic in advising others to legally shelter as much money as possible to keep it away from metastasizing health care costs.

 

[MaggieD]

i think it's unethical for the health care industry to eat entire estates. we're the only first world country that does it this way. i've actually heard people say that they hoped they went quickly so they could actually leave their kids something. that isn't the American dream, and i'm unapologetic in advising others to legally shelter as much money as possible to keep it away from metastasizing health care costs.

It isn't healthcare costs you're sheltering from. There are no metastasizing healthcare costs. It's adequate old-age care your way denies. It's unconscionable, in my opinion.

 

[Fisher]

To some people passing it on is more important than using it themselves. It just depends on what the person wants to do. I don't tell people what they should do which drives them nuts--I just tell them what their options are and the best way I can think for them to achieve what they want to do. Nobody has a crystal ball that works these days--so you have to play the odds and the client has a better sense of their health, their life expectancy, and their goals than I do.

 

[Helix]

It isn't healthcare costs you're sheltering from. There are no metastasizing healthcare costs. It's adequate old-age care your way denies. It's unconscionable, in my opinion.

i'm afraid that i have no idea how you're reaching that conclusion.

 

[UtahBill]

her kids won't inherit much if she lives another 25 years, the house probably, and that is all. Her current house has some equity, but not much.
Some good advice here, I will certainly ask her relatives and friends to speak up if it seems she is going in a dangerous direction.

 

[Harry Guerrilla]

got a friend, her husband just died, life insurance of $200K, monthly income from SS and teacher retirement, so about $3K per month. There is very little in savings.

Her house is NOT paid for, and she needs to sell it and get one more suited to her age, a single level, smaller home near family.

She has been advised to get a financial planner.
I am concerned that the advisor will talk her into investing in the stock market.
at her age, about 70, she should not be risking her financial assets, or paying fees to have someone else manage her money.

It is very frustrating to me when elderly friends and neighbors ask my advice, then ignore it and get ripped off. Got one next door who let the Dealership replace her rack and pinion because it was leaking, altho there was not a single drop of anything on her garage floor. Another neighbor, old man, was about to be ripped off by AAA. They could not start his car and told him that it needed to be towed to AAA even tho it was under warranty by Toyota. They told him that it was probably the car's computer. They made an appointment with a towing company and the AAA guy left. I went over and started his car with jumper cables. LSS, he had left an interior light on for a long period of time, battery was very dead, and the AAA guy was using one of those portable jump starters that has a small battery, not up to the task. I had to run my truck while jumping his car to get it to start.

Back to the widow, she isn't much of a listener, interrupts others like she isn't even aware that they are talking. Still, I hate to see her end up losing a large chunk of what little she has left to unethical "advisors".

How do I convince her that she does NOT need a financial advisor? What do I tell her to watch out for when they meet and how to recognize when he starts giving her bad advice? I am thinking that I should be there with her, and will if she will let me.

There are two main types of financial planners, the commission "sales" based planner and the fee only planner.
I suggest she go with the latter, they charge a flat fee for financial advice, if she needs a FP.

Fee-Only Financial Planner: What's the Difference? - Forbes

Fee-Only Financial Advisors Home - NAPFA - The National Association of Personal Financial Advisors

 

[greyhat]

got a friend, her husband just died, life insurance of $200K, monthly income from SS and teacher retirement, so about $3K per month. There is very little in savings.

Her house is NOT paid for, and she needs to sell it and get one more suited to her age, a single level, smaller home near family.

She has been advised to get a financial planner.
I am concerned that the advisor will talk her into investing in the stock market.
at her age, about 70, she should not be risking her financial assets, or paying fees to have someone else manage her money.

It is very frustrating to me when elderly friends and neighbors ask my advice, then ignore it and get ripped off. Got one next door who let the Dealership replace her rack and pinion because it was leaking, altho there was not a single drop of anything on her garage floor. Another neighbor, old man, was about to be ripped off by AAA. They could not start his car and told him that it needed to be towed to AAA even tho it was under warranty by Toyota. They told him that it was probably the car's computer. They made an appointment with a towing company and the AAA guy left. I went over and started his car with jumper cables. LSS, he had left an interior light on for a long period of time, battery was very dead, and the AAA guy was using one of those portable jump starters that has a small battery, not up to the task. I had to run my truck while jumping his car to get it to start.

Back to the widow, she isn't much of a listener, interrupts others like she isn't even aware that they are talking. Still, I hate to see her end up losing a large chunk of what little she has left to unethical "advisors".

How do I convince her that she does NOT need a financial advisor? What do I tell her to watch out for when they meet and how to recognize when he starts giving her bad advice? I am thinking that I should be there with her, and will if she will let me.

She should consult a Certified Financial Planner for guidance. I think you assume too much about an entire profession and this may actually hinder your friend's financial goals.

 

[imagep]

To some people passing it on is more important than using it themselves. It just depends on what the person wants to do. I don't tell people what they should do which drives them nuts--I just tell them what their options are and the best way I can think for them to achieve what they want to do. Nobody has a crystal ball that works these days--so you have to play the odds and the client has a better sense of their health, their life expectancy, and their goals than I do.

Then maybe she should just give it away, before she blows it, and before her heirs are too old to enjoy it. I've never understood the rational behind waiting til one dies before they share their wealth. A dollar in the hands of loved ones today is more valuable than dollar in their hands 30 years later.

 

[Fisher]

Then maybe she should just give it away, before she blows it, and before her heirs are too old to enjoy it. I've never understood the rational behind waiting til one dies before they share their wealth. A dollar in the hands of loved ones today is more valuable than dollar in their hands 30 years later.

When it comes to real estate, there is a capital gains tax reason. If I give you a piece of property worth $300K that I paid $40K for, you pay cap gains tax on $260K if you sell it when you get it. If you inherit it from me, you get the value at the time of inheritance as your basis so you would pay $0 cap gains if you immediately sold it. Not a huge issue today with low rate, but it will be 5 years from now if liberals like you have your way with cap gains rates being in the 30% range :mrgreen:

 

[fmw]

i think it's unethical for the health care industry to eat entire estates. we're the only first world country that does it this way. i've actually heard people say that they hoped they went quickly so they could actually leave their kids something. that isn't the American dream, and i'm unapologetic in advising others to legally shelter as much money as possible to keep it away from metastasizing health care costs.

People her age have medicare.

 

[MaggieD]

People her age have medicare.

He's talking about long-term care.

I find his position that seniors should hide their assets (most often at the encouragement of their family) and wait to run out of money so "the state" will pay for their care abominable.

 

[Helix]

People her age have medicare.

doesn't matter. get sent to a nursing home, and see how all of the work of your ancestors can get eaten up if you live a long time. i've heard "i hope i go quick so that my kids can have something" too many times.

 

[greyhat]

He's talking about long-term care.

I find his position that seniors should hide their assets (most often at the encouragement of their family) and wait to run out of money so "the state" will pay for their care abominable.

I agree!! Medicaid is there for the poor and indigent, not for middle class families looking to create a wealth transfer because then the test of us get stuck with the bill!! WTF?!

FREELOADERS! Get LTC insurance if you want asset protection...

 

[fmw]

He's talking about long-term care.

I find his position that seniors should hide their assets (most often at the encouragement of their family) and wait to run out of money so "the state" will pay for their care abominable.

It is also likely to be illegal.

 

[MaggieD]

I agree!! Medicaid is there for the poor and indigent, not for middle class families looking to create a wealth transfer because then the test of us get stuck with the bill!! WTF?!

FREELOADERS!

I have a friend who is an intake manager at a nursing home. She deals with horrified family all the time -- horrified at the fact that their parent's assets will now be used to provide an acceptable standard of long-term care. In the Chicago area, that's probably a minimum of $7,000 a month. They'd counted on that money to be transferred, as you say. Her standard reply:

Your mom saved for a rainy day her whole life. It's pouring outside.

 

[MaggieD]

It is also likely to be illegal.

There's a 5-year clawback.