I am new to this forum and have a sad tale to tell, and hope that you experienced people can help. I had a long conversation tonight with one of my dearest friends. She is in retirement and is having a terrible time managing financially. She always feared the stock market, so most of her pension investments went into fixed funds. She also never came near to maxing out her allowed investment. Now she doesn't have enough. She's on SS, plus a bit from a part time job which has just ended. She is not the picture of health, and lives with her permanently disabled sister, who is on SSI. To cover her period of unemployment, until a new job comes up, she's going to have to take out several thousand dollars in cash from savings.
She has her retirement money in a TIA CREF annuity, which she hasn't touched (about $300,000). She is nearing the point where, for reasons I don't understand, she will have to begin removing money from the annuity by one-ninth of the total. She spoke to her TC advisor last week and was told to take the first ninth and put it into other TC instruments, 1/3 to stocks, 1/3 to real estate (not a REIT), and 1/3 to inflation-adjusted bonds. Does this sound good? Ir sounds like a lot of real estate to me. Her advisor told her that we are about to enter an inflationary period and that both the bond and real estate funds will benefit.
She is terrified of the stock market. She told me that she checks her stock fund every day and if it loses $100 she can't sleep. I've tried to explain over the years that it is not the amount, it's the percentage that matters, and that ultimately the market comes back. But now, at age 67, she is only beginning to understand that.
I have two questions.
1. Does her advisor's advice sound sensible for a person who is ultra-conservative about investing, but needs some growth plus stability?
2. Can anyone recommend a good book written in plain English about managing a very modest retirement? I've suggested magazines such as Money, but she said that she doesn't really understand or like them. I know, very hard-headed, lol!
Thank you for any advice.