Dear Dave,

My mom is 75, and I’m the executor of her estate. She has $500,000 in retirement accounts, and the only debt she has is around $70,000 on her mortgage. Most of her money is in the stock market, with only $20,000 in a money market account, and this worries me. She lives well within her means, so am I wrong to be concerned? Also, do you think she should go ahead and pay off her mortgage? 

- Keith

Dear Keith,

Yes, I would recommend she go ahead a pay off the mortgage. If she can do that at age 75, and still have $430,000 left, that’s the way to go.

Now, being in the stock market at her age sounds like a shock to you. I don’t think it’s a bad thing at all. It’s not what the typical financial planner tells you to do. For the most part, they’ll tell you to get super conservative with your money as you get older. But from what you’ve said, she’s not going to use this money. She’s going to use the income from this money. So, the money’s going to be left alone. If she’s in good mutual funds, and not single stocks, I’m not worried about her.

Let’s pay off the mortgage, and then she can start taking her income off the remainder. With the house payment out of the way, she won’t need as much in terms of income, because she won’t be sending money to the bank to pay the note on the house anymore. I’m comfortable with that. I’m 58, and I’m 100 percent into stocks through mutual funds. I don’t have anything else, and I really don’t ever plan on changing that.

- Dave 

Changing jobs and retirement savings

Dear Dave,

What happens to my Roth 401(k) when I change jobs and go to a company that doesn’t offer this type of investment savings account? How should you proceed in this situation?

- Jamie

Dear Jamie,

Anytime you leave one company for another, you should always roll your 401(k) from your former employer into an IRA (Individual Retirement Account). If it’s a traditional IRA, you roll it to a traditional IRA. If it’s a Roth IRA, you roll it to a Roth IRA. You would choose your own mutual funds, and you would manage your own accounts, with the help of a financial advisor of your choosing.

When it comes to choosing a financial advisor, my advice is to find someone with the heart of a teacher. A good financial advisor will help you make informed decisions about your money, and they will explain all aspects of your investments until you fully understand everything. In short, a quality advisor will never encourage you to invest in something you don’t understand.

Also, look for someone with the ability to assess your overall retirement picture. You need someone who will help you map out a complete retirement plan, and your advisor should be able to explain the big picture and provide a comprehensive, easy-to-understand strategy for achieving your retirement goals.

- Dave
