My 76-year-old mom has $25,000 in a money market account and, to be honest, that worries me

Dear Dave,

My mom is 76, and the only debt she has is about $60,000 left on her mortgage. She has $600,000 in retirement accounts, plus a long-term care insurance policy. But she has just $25,000 in a money market account with check-writing privileges for everyday bills and purchases. To be honest, this worries me. She has always lived within her means, so am I wrong to be concerned? She has also been talking about paying off her mortgage, and I’m not sure how I feel about that, either. I’d love your opinion.

Kelly

Dear Kelly,

You sound surprised that she’d still be in the stock market at her age. In my mind, that’s not a bad thing at all. It might not be what the typical financial planner would tell you to do, because for the most part they’ll try to get you to be super-conservative with your money as you get older. But from the way you’ve described things, it sounds like she’s not planning on using this money, but using the income from the money. If that’s the case, she won’t whittle it all down to nothing. So, if she’s in good mutual funds—not single stocks—I think she’ll be just fine.

Now, let’s talk about the mortgage. I would absolutely recommend she go ahead a pay it off. If she can do that at age 76 and still have $540,000 left, that’s the way to go. Let’s pay off the house, and then she can start taking her income off a percentage of the remainder. She won’t need much with the house payment out of the way, because she won’t be sending money to the bank to pay the anymore.

—Dave

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