Best options to safely invest $100,000 for 65 year old retiree

[FrugalSaver]

With the death of a spouse, the life insurance policy is going to pay $100,000.  The surviving spouse is 65 and in decent health. 

Anyone here have any experience and wisdom on cost effective options?  Would an annuity be a good option here?

There's a significant amount of credit card debt (approaching $100,000) and $200,000 of home loans (primary mortgage and a HELOC)

There's the following income:
- $1,703 husband's pension that will continue to be paid to the spouse
- $2,236 husband's SS check that she will now start receiving
- $225 her pension
- Life insurance of $100,000

That's what I know for now and continue gathering more info.

[Telecaster]

Annuities are very seldom a good idea.  Based on the information you provided, I'd say paying off or paying down the credit card is the best option. 

[golfreak12]

I read a bit on the other thread but with the info you posted above.

- I would declare bankruptcy to get rid of the $100K credit card debt.
- Between the pensions and SS, she can easily live on >$4k/month.
- Put away the $100K life insurance in some account and never touch it. Only in emergency.

[lizzigee]

Without knowing their full circumstances, I have real problems with the suggestion of declaring bankruptcy. If they ran up the debt, they have a moral obligation to pay it. Mustachianism is about a way of life, not just money. If you can't be trusted to meet obligations you choose to enter into, then lack of money is not the problem, lack of self respect is. If they are starving and about to lose the roof over their head, that's different. If it's just they don't want to pay, well they should have put on the brakes well before they hit $100K in CC debt

[mozar]

I would also have her declare bankruptcy. Bankruptcy is about giving people a clean slate when they've gotten in over their heads. It has nothing to do with morals, it's a business decision. Lenders are well aware of the risk they take when lending people money and nobody complains about "morals" when a company goes bankrupt.

[golfreak12]

Without knowing their full circumstances, I have real problems with the suggestion of declaring bankruptcy. If they ran up the debt, they have a moral obligation to pay it. Mustachianism is about a way of life, not just money. If you can't be trusted to meet obligations you choose to enter into, then lack of money is not the problem, lack of self respect is. If they are starving and about to lose the roof over their head, that's different. If it's just they don't want to pay, well they should have put on the brakes well before they hit $100K in CC debt

If you read up on the other threads.
Husband is pretty much in charge of finance and suddenly died.
Wife needs a clean slate and start over. Declaring bankruptcy to clear the CC debt is the best option.

[Reynolds531]

Can you declare bankruptcy with a cheque from the insurance in your back pocket?

[FrugalSaver]

Can you declare bankruptcy with a cheque from the insurance in your back pocket?

From my reading, yes as an insurance check is not applicable to unsecured debt, which credit card debt is.

The surviving spouse is a brain hemorrhage survivor and, while fully functioning, not able to work and was dependent on her husband who passed suddenly due to a freak accident.

FWIW, she's adamantly against declaring bankruptcy and I'm personally not for it, but I will evaluate all options to help make sure she can live stress free with no means for making money, on the money she and her husband earned.

[retired?]

I agree on previous annuity comment.  Usually fees are too high.  Aside from the particulars of the situation, which are hard to exclude, assuming 4250 covers expenses,  I'd normally suggest some mix of low fee index funds with a bond and equity mix that is comfortable for her.  Perhaps some amount for a high dividend fund.

Also, declaring bankruptcy isn't a sure thing.  Doesn't that check turn into cash at some point?  You'd have to speak to an attorney or read up on what counts towards income, debt and assets.  The attorney's fee might be well worth it if there is good guidance on how to arrange things before declaring.

[Erica]

Without knowing their full circumstances, I have real problems with the suggestion of declaring bankruptcy. If they ran up the debt, they have a moral obligation to pay it. Mustachianism is about a way of life, not just money. If you can't be trusted to meet obligations you choose to enter into, then lack of money is not the problem, lack of self respect is. If they are starving and about to lose the roof over their head, that's different. If it's just they don't want to pay, well they should have put on the brakes well before they hit $100K in CC debt

Ditto to this ^^^ She is getting 100K, that's about what she owes on Credit Cards. She needs to pay those off, otherwise she is stealing the  money.  If she was barely getting by, or not at all, then that could easily be a different situation

I cannot believe anyone would actually file bankruptsy while they have the money they owe, right in their hands in the form of an inheritance. All while having excess pensions and Social Security. She's loaded at getting 4K per month. That's more than double what she needs to survive. I am glad she is against it. Good for her. But So sad the direction this world is going

[golfreak12]

Its not a sad world at all.
Her husband was in charge of finance. She has little control of how the CC was spent.
You can argue that a small part of the CC debt was hers but not the entire $100K.
If she knowingly spent the $100K on the CC with no intention of paying it back, then I would agree that its stealing but not in this case.
If there is a legal way to discharge that CC debt, I would advise her to do it in a heartbeat without one bit of guilt.