I am 69 years old, have $200,000 in a savings account, and $1000 a month in social Security. I have $30,000 in car debt. I rent, but really would like to own some type of housing. Really worried about out living my savings.
None of the answers you get will be "good", since there are no Good Answers for someone in your situation.
- Sell the car and replace it with something in the $5-10K range.
- Move the $200K to a bank that pays "reasonable" interest. Ally, Marcus and Synchrony are good examples of such banks.
- Live "lean": smaller apartment (or move in with one of your children), cut out HBO/etc, cook instead of microwave prepared foods, etc.
- The only way you might be able to buy a house is to move to a poor rural area. Even then you'll owe insurance and some property tax, and have to repair your house.
It is the risk - return problem. Banks are safe ( low risk) and have terribly low returns. I suggest Vanguard funds; Their site will show choices and relative risk/reward. Car loans are also a ripoff, you may find you paid all interest up front so there is no advantage to paying it off/ selling the car. I am old and making about 8% but like most investors , I have had some serious ups and downs to learn from. I don't think you can afford that (common stocks). Vanguard Money Market is paying 2.27% today, it is as safe as a bank. Fidelity is also good.
This is a very tough question because $200k is not a lot and $1k/month is also not a lot. Getting a mortgage for under $1k per month will be quite hard (property value of $100k or slightly above with a good interest rate).
Buying a house of similar value ($100k) cash could work, but you'd still be liable for repairs, taxes and homeowner's insurance.
On balance, depending on credit, I would assume a mortgage is slightly better. because you'd only invest about 10% of your savings, so if anything catastrophic happened you'd still have emergency savings in the bank.
Questions to figure out first:
1) How long do you intend to live there ? I assume asking the question means forever.
2) Are you investing the remaining money ? Even a high-yield savings account will obviously not beat the interest you'd pay on a mortgage. (at this point, if you haven't invested your money don't start. The risk is prohibitive considering the probability of needing the money at any time)
3) What are property values like in your area and also what are rents like ? It's possible that renting is cheaper even fairly long term.