With the top of kid assist, how finest to cowl monetary bottlenecks

Dear Rick:

I hope you can give me a few tips about my situation. I’m in my 60s and divorced for about five years. The maintenance and my part-time job cover my livelihood. My livelihood ends this year. The question is how am I supposed to cover my deficit?

My first option is to work full time, which my employer says I can easily and that would more than cover my living expenses. My second option is to claim my IRA, which is currently around $ 300,000. (Other than my IRA, I have very little other money). My third option is to convert my IRA into an annuity. An annuity, part-time income, and social security should get me in shape. My question, what should I do?


Dear Vivian:

First off, I think it’s great that you focused on the opportunities that are available to you. I wish more people would do that. I should also mention that it’s great that you have options. I keep telling investors that we may not know what the future will bring, but the key is having options. Having financial resources gives people options.

In reviewing your options, I would suggest that you keep working. I think that will give you the greatest flexibility in the future. As I mentioned earlier, one of the keys to financial success is having options. This allows the money in your IRA to keep growing until you can no longer work.

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In addition, the longer you work, the fewer years you will need to live on your portfolio; This is how you make sure you don’t run out of money.

My least preferred option is to use your IRA money to buy an annuity. I am not entirely against lifelong pensions because they meet a need in certain situations; However, I think it is a mistake to take your entire portfolio and accrue interest on it. This gives you very little flexibility on the road. After all, you are no longer entitled to the capital after a lifelong pension.

If someone were to buy an annuity, it should not be done with their entire portfolio, but only with part of it. I believe it is a mistake for every investor to lock up their money irrevocably. We all know the only constant in the world is change, and if you are flexible with your money you can adapt to change.

When all of your money comes from social security and an annuity, you have very little flexibility and very little opportunity to change.

As we live longer and the cost of living increases, more people should look for ways to continue their careers for as long as possible. After all, a few more years of work can mean the difference between a comfortable retirement and a retirement.

Much luck.

Rick Bloom is a paid financial advisor. His website is www.bloomadvisors.com. If you’d like him to respond to your questions, email rick@bloomadvisors.com.

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