Retirement News : Seniors : Tips for investing before and during retirement

Tips for investing before and during retirement

Date Added: 02-09-2005

Finances play a heavy role in retirement.  Read the excerpt from the question and answer session below.

Middle East North Africa Financial Network - Middle East

Thursday, September 01, 2005
 
Morningstar Column
Sue Stevens, CFA, CFP, CPA

Sep. 1--QUESTION: My wife and I are in our 70s and retired, and we have a valuable, paid-off house. Our current asset allocation is 40 percent large cap, 9 percent small cap, 4 percent international, 5 percent bonds, and 41 percent cash.

Is there a better distribution that will also allow us to sleep? We're doing fine now, but we just need reassurance or a better plan. We're also giving $10,000 a year to our two grown children to help avoid estate taxes.

--Kent

ANSWER: That seems like a lot of cash. Even though it may seem "safe," you may actually be losing money to inflation. At least consider certificates of deposit (CDs) that will give you more interest; Christine Benz recently wrote an article about how to wring the most return from your cash holdings, and you may also want to peruse "Model Portfolios for Retirees" for more ideas.

Keep in mind that you won't pay any estate tax if your taxable estate is under $3 million in 2005 and $4 million in 2006. (These numbers are for a couple. Cut them in half if you are single.) Assuming you have enough money to last throughout your own retirements, you may want to gift to your children even if it doesn't help from an estate-tax perspective.

Read the entire article:

http://www.menafn.com/qn_news_story.asp?StoryId=CqXz8WeientaYmvrPChnMB3jPBNzLC3rPBG