MMDad said:
That's enough money to consider using an accountant. Anything else you get off of here will be amatuer guesses. We mean well, but if we were that smart would we still be here?
A financial advising accountant is usually a bad move. Accountants know how to tally money, pay taxes, etc..., but they are rarely good at the other side, as well.
I highly recommend stoping by an Edward Jones office and letting them get the complete financial picture and timeline. A lot of financial advisers will pre-condition their recommendation to what they think you want, but a good EJ adviser will take the whole financial picture and tell you what you really should do.
A couple problems you have already...
1) You are talking limited funds for retirement as is. You should be trying to increase the value on that $280k until she gets another fixed income (i.e. social security) and not using any of it to survive till then, if possible. If you deplete that any further (don't at least break even), that doesn't help future matters.
2) Social security isn't going to do much for her. If she has a valuable home and she can down size, she should consider that. If she can capture at least another $100-$150k, she will do okay in retirement. The rule here is to assume about 5-6% of her retirement nest egg will be the income she can take out of yearly if she plans to maintain the fortune. If she doesn't need to save any of the funds themselves, a fixed annuity is her best option then and will give her a better level of income than the 5-6%. She can also do a fixed annuity with a small survivor benefit to cover costs at death (like a fixed plus $50,000 survivor benefit).
3) Don't speculate at all with that money like Dustin suggested. Don't play real estate, don't do small business. With her that close to retirement fixed income she would be the mainstay to increase on... not what anyone thinks is going to happen in any market.
4) The simple rule is your percentage of fixed income investment should be around equal to your age. If you are 60, then 60% should be flat fixed income investments. That doesn't mean put the rest in stocks. The rest needs to be conservative, too, at that point. The highest risk you should take is conservative growth and income funds (such as American Funds, USAA, Fidelity, and a few others).
MMDad is right on one point. You need to speak to an appropriate professional who isn't just trying to show you something to buy right now. They need to be looking at the whole picture and planning years ahead.
edit: Also, a side point, is how her health is. If a lot of women in her family live long healthy lives and she shows signs of being the same, helping that fortune last is imperative and leaning toward an annuity is better (she will probably live long enough to get a benefit from it). On the flip side, if she is in poor health, an annuity is a bad idea because she will never capture the full value more than likely. Annuities are calculated based on actuarys... you want to get an annuity if you feel you will at least make the actuarial figure for you.
