SMART MONEY: A little know-how will quiet fears of the stock market
DEAR BRUCE: I am a recent widow (61 years old), and I decided to take my husband’s Social Security now. I have about $400,000 in money market accounts and CDs. My house is paid for (worth $255,000), and I am thinking of selling and downsizing to something much smaller.
My question is, what do you suggest I do with the $400,000 plus the money I make from the house? I’m afraid of the stock market. — N.M., via email
DEAR N.M.: You didn’t mention why you decided to take your husband’s Social Security now. It would appear that with your investments and your house being paid for, you perhaps don’t need the Social Security money now. The longer you wait, the more you will be receiving when your expenses may be increasing and making more demands upon your savings. It is something I would consider. As to what you should do with your $400,000, given that you are afraid of the market, you are condemned to almost nonexistent returns unless you would be comfortable with an annuity. In some cases, annuities are desirable, but in most, the penalties for early withdrawal, etc., make them not the best choice.
I think what you should do is get some information on the stock market. You didn’t indicate if you are working. If you aren’t, why not spend some time going back to school or taking a course. Find out what the stock market offers. There is no reason to be afraid. It is the only solid choice. You are talking about the difference between making $6,000 to $8,000 in a money market or $24,000 to $30,000 in the marketplace per year. Think hard on it.
DEAR BRUCE: Where’s a good place to buy gold or silver coins? Do you advise it? — Ed, via email
DEAR ED: There are many good and reliable organizations that will buy and sell gold and silver coins. You will have to do your own homework. Ask for references from companies and individuals. It takes a little bit of doing, but there is no question that many competitive enterprises deal in coins.
DEAR BRUCE: My husband was married 10 years ago to his first wife. She is collecting disability benefits on his Social Security although she married after they were divorced. Will this affect me in any way as his present wife? — F.K., via email
DEAR F.K.: The fact that your husband’s first wife is collecting will in no way impair your ability to collect from Social Security. Assuming you meet the other criteria that are applied to the specific program, you are home free. In other words, even after 10 years divorced, you can collect, the first wife can collect, and possibly a third could collect, should that person meet the criteria that applies.