You're working, and you've got a family that depends on you - both now and down the road. Where do you invest your money? Do you borrow against the equity in your house? Through a preferred provider relationship with USAA, The American Legion can provide expert financial advice to just about any question.
There’s no doubt assisted living or, for that matter, home health care or nursing homes carry a pretty hefty price tag. That’s one reason we counsel folks about long-term care insurance. You might want to look into your options on that front to defray the potential expense!
As far as investing your nest egg goes, we don’t really know your age or when you might needs these funds. So let’s briefly explore several options with an appropriate time frame to consider.
• Certificates of deposit (six months-seven years). Although CDs are not paying astronomical rates, they are typically more attractive than savings accounts. You might consider building a CD ladder. For example, if you had $40,000 to invest you would buy four $10,000 CDs – six-, 12-, 18- and 24-month maturities. As each CD matures, you could use the money if you want or need to, or you could buy a new 24-month CD to keep the ladder going. As interest rates rise, you will stand the best chance of capturing the higher rates.
• Fixed savings annuity (seven-plus years). This investment is guaranteed by the life insurance company that issues the policy. The interest you earn is tax-deferred; you don’t pay taxes until you pull the money out of the annuity. Rates are typically attractive, but normally there are surrender charges or restrictions on accessing your investment. It’s wise to do your research to ensure you understand what you’re investing in before you invest.
• Bond funds (three-plus years). This type of mutual fund invests solely in bonds and is typically utilized to generate income, but also may serve to mitigate the volatility in your portfolio. Unlike the previous two options, bonds can be impacted by market volatility. Therefore, the value of bonds and bond funds fluctuate. There are a wide variety of bond funds but the most conservative would be short-term corporate or short-term government bond funds.
• Stock funds (seven-plus years). Stock mutual funds represent a collection of stocks, aka securities, of a particular type, such as large, small or foreign companies. Owning stock in a fund allows for all-important diversification, even with a smaller amount of money. We’re fans of mutual funds rather than individual stock picking, which can be tricky even for a paid professional!
This should give you some food for thought. Feel free to give one of our advisors a call at (800) 531-3392 if you would like to discuss some possible solutions to your specific goals and objectives.