Author Topic: Guidance on Investing for Parent  (Read 382 times)

gillstone

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Guidance on Investing for Parent
« on: March 15, 2021, 10:06:52 PM »
My father has come into money after his mother died.  He is in his 60's and not good with money.  He currently has a very large sum sitting in a savings account because he likes looking at the balance. He's agreed to start investing and asked me to oversee the process.  I know how to target for myself, but he's a different case.  Here are the details:

Age 66
Current annual expenses/spending habits: $80,000/year and no he's not getting onto any tighter of a budget
Current investments: $110,000 in a conservative income blend of funds
Savings: $750,000

He can reasonably expect to receive an additional $2M-$3M over the year as different pieces unwind. 

My goal is to generate enough income to let him collect $80k/year but not dip into principal.  Ideally, actual income would exceed 120k so there is some growth for when his care gets more expensive. 

Any suggestions?

zolotiyeruki

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Re: Guidance on Investing for Parent
« Reply #1 on: March 16, 2021, 08:12:33 AM »
Him agreeing to invest is definitely a great first step.  The $860k he current has isn't enough to support $80k a year and have a low probability of failure, but I'm guessing he also collects some social security?  And the $2-3M will definitely set him up for success.

Could you set him up with a simple 60/40 stock/bond split, and set it up so that all interest/capital gains distributions/dividends are transferred into his bank account?  That way, he has access to the money he needs for his lifestyle, but the principal is less immediately accessible.

ejmyrow

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Re: Guidance on Investing for Parent
« Reply #2 on: March 19, 2021, 12:11:24 PM »
Does he have long term care insurance? Is it too late to get that? Just an idea

yachi

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Re: Guidance on Investing for Parent
« Reply #3 on: March 19, 2021, 01:29:29 PM »
If you took all the cash, he could get an immediate annuity paying $200,000 per year.  That's not inflation protected, so you wouldn't want him to spend all of it.  On the other hand, if you know how to target for yourself at age 66, why is your father different?  Are you worried he'll blow it, or are you worried he'll leave too much in cash, or are you worried he'll freak out at losses at the wrong time?