QUESTION
As a family lawyer I was recently asked for financial advice about investing a small inheritance. The heir, a woman of 64 and her disabled husband were advised to place the money in a mutual fund and do a monthly withdrawal. My question is whether this is a safe thing to do? They need the income and have no investment experience. Your comments please. They have no financial experience at all.
ANSWER
The absolute worst thing this woman could do is to get into mutual funds. She may as well get into a sea full of sharks, though that may be safer.
She should buy an annuity to give them safe, reliable income every month. Pay off any debts first but otherwise the money should generate lifetime income for them both.