Author Topic: Reallocation Advice  (Read 609 times)

lbwarner24

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Reallocation Advice
« on: March 19, 2018, 01:19:23 PM »
Hello fellow Mustachians. My grandfather recently passed away and left my 85 year old grandmother with about $500,000 invested 50% in the stock market - various individual stocks and indexes. I feel like this is too risky considering her age. Thoughts on a new allocation? Seems like 80% VBTLX and 20% VTSAX would be more conservative considering she has no long term care insurance and may need this within the next 5 years. Thoughts please.

MDM

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Re: Reallocation Advice
« Reply #1 on: March 19, 2018, 04:16:45 PM »
No way to know what is "correct" except in hindsight.  50/50 is not at all unreasonable.  E.g., see Safe withdrawal rates - Bogleheads: historically, the best results came with a 75/25 stock/bond allocation.

CorpRaider

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Re: Reallocation Advice
« Reply #2 on: March 20, 2018, 11:39:16 AM »
I personally cannot envision ever going above 50% allocation to bonds given inflation risks, especially those in healthcare and aging costs, and the bond-like exposure we all have via social security/social welfare programs.  Also, you may not want to go messing around and incurring taxes and fees.

Radagast

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Re: Reallocation Advice
« Reply #3 on: March 20, 2018, 08:59:28 PM »
I can't comment on the stock allocation because I do not know what is there or the tax consequences of selling. However, a 50/50 allocation is not overly risky unless she plans to spend all of it within the next few years.

One possible option is annuities. I'm not an expert on them and there are many bad options to beware of, but if she badly needs the money to cover expenses they can give very high rates throughout an unexpectedly long life.