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Originally Posted by arrowheadnation
Everytime I see this thread get bumped to the top I think, "I'm going to ask if anyone might have advice for my dad." and I never do....until today.
I'll try to avoid writing a book as best as possible. My dad is a 67 year old widower. He worked as a manual laborer at a cattle feedlot all of his life so no 401K, no retirement, nothing. He still works there, but is planning to retire in the next couple months. He gets social security and his rent (which has not moved since the 1980's is still $125/mo.) So his monthly bills/obligations are not too big. He doesn't tell me a whole lot about his financial situation, just bits and pieces here and there. I do know he has a modest savings (probably in the mid five figures) that he believes will "get him bye until he dies." He currently has a pretty large chunk of that savings "in the stock market." I believe this is actually in some sort of an IRA with Edward Jones. My question for those on here is: his Edward Jones rep told him he could pull his money out and put it into an annuity where he would get a check for roughly $300/mo. for the remainder of his life, but after death, that money is gone. I wanted to see if this was correct and if there were better options for him. He keeps telling me he's going to "get his money out of the stock market," but each time he meets with Edward Jones, they talk him out of it. I know my question isn't clear, but I guess I'm just looking for recommendations from people who have been there or have some knowledge in this area. Thanks in advance. Sorry, I tried to keep it short.
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So annuities are definitely a thing. Unfortunately, they're not a thing I'm terribly familiar with. They are generally offered by insurance companies. It's basically a mathematical computation to them -- you give them X, and based on your life expectancy etc. they will pay you Y dollars per month, every month, until you die.
At 67 if in reasonable health he should be looking to support himself for maybe 20 years. His biggest likely costs are health-related and housing, if anything happens to that sweet essentially no-rent situation he has. He presumably has Medicaid/Medicare (programs I am not familiar with), but may want to look into supplemental insurance (sometimes call Medigap) for the things Medicare won't pay for.
As to staying in the market or not -- for his anticipated life expectancy, he should be in the market to some degree, though obviously with a focus on capital preservation and income generation rather than the straight growth I'm often promoting on here for people who have 20+ years of anticipated work-life in front of them.
Hope that helps.