I will receive a windfall of $225,000, tax-free, in July. The money comes from the World Trade Center Health Program. In the days and weeks following the 9\/11 attacks I volunteered at St. Paul\u2019s Chapel by giving out food and drink to the workers, and preparing kits of throat lozenges and socks and other things for them.\u00a0<\/p>\n
In 2015, I was diagnosed with lung cancer. Fortunately, it was caught early. After having had a lobectomy and undergoing chemo over a three-month period, I moved into the scan phase. All the scans have been negative, including one just a few months ago. I monitor my health annually now with a chest scan. And I\u2019m generally in good health.<\/p>\n
\n \u201c<\/span>\u2018My plan is to set aside 1\/3 for savings, 1\/3 for investments and 1\/3 for spending. I want to top off my retirement fund to $500,000.\u2019\u201d<\/span>\n <\/p>\n<\/p><\/div>\n<\/p><\/div>\n How best should I use this money? I am 70, single with no dependents, still working part time as a freelance writer and editor, collecting Social Security and a pension of $468 per month. I have no debt and own my apartment, whose maintenance expenses, which includes electricity, are slightly under $1,000\/month.\u00a0<\/p>\n My total expenses, including maintenance, are between $3,500 and $4,000 a month. I enjoy working, so don\u2019t plan to quit. I also need the extra money. I put 15% of my income in a savings account. I have $477,000 in my retirement account. My plan is to set aside 1\/3 for savings, 1\/3 for investments and 1\/3 for spending. I want to top off my retirement fund to $500,000.\u00a0<\/p>\n I plan to travel to Spain in October with friends, make improvements in my apartment, such as buying a leather lounge chair, new window treatments and kitchen cabinets, and perhaps buy new ceiling fans and replace my bathroom flooring. I also love clothes, so I will buy some new items too. How do you think I can best save and invest this money?<\/p>\n Happily Working into my Seventies<\/p>\n Enjoy your life. You certainly deserve it.<\/p>\n You have a lot figured out already. Congratulations on (a) regaining your health and (b) securing your financial health. Making your house comfortable is a good investment in itself, while leaving room for you to make adaptations if your mobility is limited in the future. Given that you have paid off your mortgage, and you have saved a considerable amount in your retirement account, while still saving money with your part-time job, you are in a relatively good place.<\/p>\n How much would you need to retire at your age? Fidelity recommends having 10 times your salary by the time you\u2019re 67. So if you earned $65,000 a year, you would need $600,000. But you are buying time \u2014 in addition to the extra money to enjoy your semi-retirement \u2014 by working part-time as a freelance writer and editor. That said, allow me to state the obvious for you: maintain an emergency fund for any unforeseen expenses, including future medical bills.\u00a0<\/p>\n About your retirement contributions. \u201cThe limit on annual contributions to an IRA will increase to $6,500. The IRA catch\u2011up contribution limit for individuals age 50 and over is not subject to an annual cost\u2011of\u2011living adjustment and remains $1,000,\u201d according to the IRS. \u201cThe catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government\u2019s Thrift Savings Plan will increase to $7,500.\u201d<\/p>\n \u201cIt is hard to say what to invest in without knowing your current risk tolerance. When do you plan to draw from your retirement accounts?\u201d says Cary Carbonaro, senior vice president and director of women and wealth at Advisors Capital Management. \u201cYou will have to start withdrawing from your IRA at age 73 if you are working or not. If you are going to save instead of investing, look for a high-yield saving account.\u201d<\/p>\n The best annual percentage yield on a one-year CD for an online bank, meanwhile, is as high as 4.8%, and the highest APY for a high-yield savings account is hovering around 5.1%. The next 6-month rate for Series I bonds will be significantly lower than the previous 6.89% rate. The new rate, which went into effect on May 1, will be 4.3% annualized. I-bonds are U.S. savings bonds. People buy them to protect against inflation.<\/p>\n Michael J. Greenberg, an estate-planning and elder-law attorney based in New York, also has some thoughts. He advises purchasing long-term care insurance, if you qualify, so that you can help ensure that you receive quality care as you get older and have the ability to pay for care at a facility of your choice. (He\u2019s not a financial planner, so as always this does not constitute financial advice, per se, but are merely suggestions as to what you can do with your money.)\u00a0<\/p>\n If you don\u2019t have heirs to whom you would like to leave your estate, and you are charitably minded, Greenberg says you could invest in a charitable gift annuity with an institution\/charity that you care about. \u201cYou would receive an immediate tax benefit, receive an income stream for the remainder of your life to help fund your lifestyle, and any money left in the annuity at your death would go to the institution\/charity,\u201d Greenberg says.<\/p>\n Investing in the stock market is a long-term bet. At 70, the general rule of thumb is that you should have no more than 30% of your portfolio in stocks. Have a great time in Spain, try not to pay the retail price on clothes. Wait for the sales \u2014 it\u2019s so much more satisfying buying at a discount! And have fun making improvements to your home and your quality of life. Every day, as you know, is a gift. I wish you continued good health, and many adventures ahead.<\/p>\n You\u00a0can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on\u00a0Twitter.<\/a><\/strong><\/em><\/strong><\/em><\/strong><\/em><\/p>\n Check out\u00a0the Moneyist private Facebook<\/strong><\/em>\u00a0group, where we look for answers to life\u2019s thorniest money issues. Readers write to me with all sorts of dilemmas.\u00a0<\/strong><\/em><\/p>\n By emailing your questions, you agree to have them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties<\/em><\/strong>.<\/p>\n The Moneyist regrets he cannot reply to questions individually.<\/em><\/strong><\/p>\n More from Quentin Fottrell:<\/strong><\/p>\n My son, 34, is getting married. My wife and I want to give him $10,000, but we\u2019re afraid he\u2019ll squander it. What do you suggest?<\/p>\n \u2018Am I heartless?\u2019 My husband\u2019s business collapsed and we sold our house. He left home to sell real estate, but failed. Should I bail him out?<\/p>\n I\u2019m sick and tired of tipping 20% every time I eat out. Is it ever OK to tip less? Or am I a cheapskate?\u00a0<\/p>\n<\/p><\/div>\nDear Happily,<\/strong><\/h2>\n