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Author Topic: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do  (Read 4624 times)

Sultan58

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82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« on: November 12, 2018, 06:54:46 AM »
My very first post and question---Ive followed this forum for 4 years now and love the maturity and wisdom thats often (but not always) displayed here.

Over the last couple of years, Ive tried to convince my 82 yr old Mom to sell all or at least part of her WMT stock....with no success. She worked for them for about 15 years and is very proud of what her account has grown to. This 200K is 75% of her net worth. She has an IRA worth 50K--no idea what its invested in.

What are her best options that minimize the tax hit and preserve her retirement? I keep trying to tell her--"Mom, ur 82 years old---youve won".....pls take your money off the table and go to bonds. 

Frustrated in Memphis.
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FIPurpose

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #1 on: November 12, 2018, 07:01:34 AM »
Well Walmart isn't terrible to be invested in. It's spinning off about 4k in dividends per year. But what is she living off of? Just SS? or does she have a pension as well? It may very well be if it's a lot of capital gains, it's best for her to just leave it for inheritance and then you would pay no capital gains taxes on it. If she needs to start to use it to live, she can sell what she needs a little bit at a time. Walmart stock is very recession resistant.
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Sultan58

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #2 on: November 12, 2018, 07:11:56 AM »
Very true...stock seems stable...but it hit 60 three years ago.....and could do the same again. Ive read all the horror stories about GE retirees who stubbornly have hung on for the last 10 years...thinking it was impossible for that stock to go down.....and GE is at now 8 bucks and change. Im sure those GE shareholders believed in their company as well...and now look at the carnage.

I think any financial advisor would be horrified to see an 82 yr old with her net worth concentrated in WMT this way....but shes pretty stubborn about it.
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Sultan58

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #3 on: November 12, 2018, 07:14:03 AM »
AHHH SORRY--didnt answer all your questions.....small SS check...1000.00 or so...no pension. She allows her dividends to reinvest in stock...so her share count has steadily grown for the last 20 years.
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Gone Fishing

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #4 on: November 12, 2018, 07:18:16 AM »
Is she foregoing spending opportunities that would make her happy?
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Sultan58

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #5 on: November 12, 2018, 07:25:20 AM »
nope...very frugal.....widowed--but does want to keep a significant nest egg for supplemental care in case she needs to eventually go to a retirement home home....as she says..."when she gets old"...lol. She doesnt want to depend on the bare bones medicaid option. She cared for an older aunt for 9 years and watched the care home slowly suck down 450K worth of assets. She has a life estate plan as of 7 years ago....for her house and property worth another 200K...but I guess thats pretty well protected now.
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SwitchActiveDWG

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #6 on: November 12, 2018, 07:33:52 AM »
I'm not sure an answer from the forum will provide you with the firepower you need in an argument with a 82-year old. Just guessing.

Your advice to her is fine though, sell it off strategically to minimize taxes and move to bonds. One stock being that high a percentage of net worth is scary, even if that stock is Walmart.
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chasesfish

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #7 on: November 12, 2018, 12:50:38 PM »
I'd just be thankful it's Walmart stock and move on.  I was in Atlanta and watched the old, proud SunTrust retirees get creamed when the company diluted it's stock in 2008.  Same for Regions shareholders.  If those examples aren't enough, then stop. 

It's not worth trying to win an argument with an 82 year old mother when it's a decent stock and she sounds intensely loyal to Walmart from her time there and proud of the shares she accumulated.   

As a side note - My step-dad inherited some Walmart stock as well.  He doesn't like selling stuff, said "Aunt X owned it for a reason".   At least Walmart is fighting hard in both retail and online and it should be a fine investment for the next 10-20 years.  GE should have been broken up and sold in pieces in 2008 when it had to go to the treasury for a bailout.
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oldmannickels

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #8 on: November 12, 2018, 01:54:30 PM »
Quote from: Sultan58 on November 12, 2018, 07:11:56 AM
Very true...stock seems stable...but it hit 60 three years ago.....and could do the same again. Ive read all the horror stories about GE retirees who stubbornly have hung on for the last 10 years...thinking it was impossible for that stock to go down.....and GE is at now 8 bucks and change. Im sure those GE shareholders believed in their company as well...and now look at the carnage.

I think any financial advisor would be horrified to see an 82 yr old with her net worth concentrated in WMT this way....but shes pretty stubborn about it.

I mean this is exactly how I would show it to her. I know plenty of people who never thought GE would go down and now call and say, "How could this be happening???"

Also maybe show her how to harvest gains at 0%. Every old person I know loves sticking it to the tax man.
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terran

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #9 on: November 12, 2018, 01:55:33 PM »
So it sounds like she doesn't need this money and lives entirely off of social security? In that case I would say leave it alone and let her hold the Walmart stock if that's what makes her happy. We all own things that others might not think we should own. When you inherit the stock you can sell it without paying taxes thanks to the stepped up basis and buy something your kids think you shouldn't own.
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wageslave23

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #10 on: November 12, 2018, 02:15:21 PM »
Quote from: terran on November 12, 2018, 01:55:33 PM
So it sounds like she doesn't need this money and lives entirely off of social security? In that case I would say leave it alone and let her hold the Walmart stock if that's what makes her happy. We all own things that others might not think we should own. When you inherit the stock you can sell it without paying taxes thanks to the stepped up basis and buy something your kids think you shouldn't own.

I agree.  If its not a matter of life and death, and you have already made your opinion known, then I would just leave it alone.  I think by spotting yourself the huge capital gains taxes you are saving, its a tough call which is the best move from a statistical point of view anyways given her limited time horizon (maybe 10yrs?).
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Sultan58

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #11 on: November 12, 2018, 05:22:14 PM »
Thanks!! I appreciate all the responses.....I know there's lots of experience on this board with older parents.....sounds like some of you have encountered similar situations.
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BicycleB

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #12 on: November 12, 2018, 06:02:23 PM »
Like the slight majority, I'd mostly leave it alone.

In more detail, I'd compliment her on it from time to time. Once in a while, add in the GE example, and the how to sell at 0% tax angle. I'd seek for 4 of 5 comments to be supportive, with only 1 offering a suggestion or an alternative path. Compliment her thrift, her security, her work ethic, her responsibility.

For your own peace of mind, note to yourself that her SS is bringing her income equal to a $250k investment using the 4% rule. Think of it as the SS being the bonds portion of a portfolio, while the Wal-Mart and the IRA are the stock portion. She's now 50/50 in stock bonds! Perfectly reasonable, perfectly healthy. Heck, if you add up the amount of bonds it takes to produce $1000/mo interest, it's more like 60% bonds and 40% stock already. She has stability plus growth, in case she lives to be 110. Diversification would be nice, but good asset allocation (stock vs fixed income) is even more important, and she's good there. Plus there's zero risk of running short of living expenses; it's only for emergencies anyway, the "fixed income" portion covers her expenses by itself. Plus, in a crash, Wal-Mart has defensive strength - it won't likely go zero. She'll have something available when she needs it.




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coppertop

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #13 on: November 13, 2018, 09:03:49 AM »
I feel your pain.  My 83-y/o MIL asked me for assistance, but won't accept the advice I give.  She pays a brokerage firm a lot of money to manage her account; she let them sell her an annuity in her 70s.  She has been sold a lot of investments over the years that she didn't even understand.  She won't have anything to do with Vanguard or anything on line. It's her money, so I have to just shut up and let her make whatever mistakes I think she is making.  It's frustrating, but she's of sound mind, so...
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Dee18

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #14 on: November 13, 2018, 11:41:55 AM »
Be glad it is Walmart indeed!  30% of the money in my mom’s trust account, left by my dad, was GE stock.  The trust is managed by a prominent investment company.  For several years I tried to get my mom to take it out of management and put it in Vanguard, but my older sister vehemently disagreed, so it stayed.  Then I tried to talk the manager into decreasing the amount of GE, but he did not.  Fortunately, my mother has a pension and Social Security and no money worries at all. 
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Sultan58

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #15 on: November 13, 2018, 05:15:32 PM »
Like the slight majority, I'd mostly leave it alone.

"In more detail, I'd compliment her on it from time to time. Once in a while, add in the GE example, and the how to sell at 0% tax angle. I'd seek for 4 of 5 comments to be supportive, with only 1 offering a suggestion or an alternative path. Compliment her thrift, her security, her work ethic, her responsibility.

For your own peace of mind, note to yourself that her SS is bringing her income equal to a $250k investment using the 4% rule. Think of it as the SS being the bonds portion of a portfolio, while the Wal-Mart and the IRA are the stock portion. She's now 50/50 in stock bonds! Perfectly reasonable, perfectly healthy. Heck, if you add up the amount of bonds it takes to produce $1000/mo interest, it's more like 60% bonds and 40% stock already. She has stability plus growth, in case she lives to be 110. Diversification would be nice, but good asset allocation (stock vs fixed income) is even more important, and she's good there. Plus there's zero risk of running short of living expenses; it's only for emergencies anyway, the "fixed income" portion covers her expenses by itself. Plus, in a crash, Wal-Mart has defensive strength - it won't likely go zero. She'll have something available when she needs it."


Thanks for the great reply...I feel much better about it now!!!
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COEE

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #16 on: November 13, 2018, 05:25:56 PM »
I didn't see where she asked you for help.

Mind your own damn business.  Sell it when/if she passes it on to you.  If you end up paying taxes on it be thankful she had something to give you.
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Imma

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #17 on: November 14, 2018, 04:11:00 AM »
Quote from: lhamo on November 12, 2018, 06:23:45 PM
Another piece of advice -- start looking at possible retirement/care places now, while she can still give her opinion and has the resources to pay for them.  Get a sense of what she feels is acceptable.  Some have arrangements where if you are a paying resident for 1-2 years, they will let you shift to Medicaid if your money runs out.  My mom ended up at one of those.  It wasn't the fanciest, but it was perfectly ok and the staff were great.  That is really the most important piece.

My 85- year old grandma, still very fit and independent, recently suffered a fracture after a fall. While she's planning on returning home, she needs to stay at a care facility for 2-3 months to recover.

We were very glad that she had done her research and visited local facilities over the years and knew which places she preferred. We were able to move her into her nr 1 choice and it's completely paid for by her health insurance. I know many people find it hard to talk about illness and death, but it's very helpful to know for certain what someone would have wanted if they can't voice their own opinions anymore.
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Much Fishing to Do

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #18 on: November 14, 2018, 06:42:40 AM »
I don't see what she's doing as crazy, or even that risky compared to what a lot do so beyond throwing out your opinion and reasoning behind it I think you leave it be.  If Walmart goes to zero she is still covering her current expenses, and Walmart is not gonna go to zero in her lifetime.  Say it tanks and cuts in half over the next 5 years and she has $150k instead of $250k, not exactly a disaster scenario where I would try harder to tell a parent what to do with their money when we all know there's also a possible upside.
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freya

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #19 on: November 14, 2018, 07:20:47 AM »
Never argue with an 82 year old.  She's earned the right to do what she wants, and it's her money!  Just be glad that your Mom is healthy and with-it enough to argue back.

You could make this suggestion:  stop reinvesting the dividends and let them accumulate in a money market account instead.  Especially if she doesn't have much of a cash reserve.
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DS

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #20 on: November 14, 2018, 07:53:37 AM »
Would do nothing in this scenario. I just watch my parents/grandparents do what they want and if they really want help from me they would ask.
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Dancin'Dog

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #21 on: November 14, 2018, 08:54:35 AM »
I wish I'd gotten my dad to swap his GE for Walmart stock.  ;)


It was only a small portion of his portfolio, so NBD...
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Rosy

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Re: 82 year old mother has 200K worth of Wal-Mart stock--wont sell--what 2 do
« Reply #22 on: November 14, 2018, 12:56:06 PM »
Her current strategy is working for her - is it not? She's happy with her Walmart stocks - let her be happy.

The suggestion about visiting some nursing homes in the area and knowing about her preferences when the time comes is an excellent idea. That way she has a say about what she likes - while she's still able and coherent and you too are already familiar with what is out there.

Be glad she is of sound mind and still strong enough and stubborn enough to live her life on her own terms - that is a gift.
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