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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: partgypsy on March 20, 2021, 07:08:15 AM

Title: Help my Mom with her retirement
Post by: partgypsy on March 20, 2021, 07:08:15 AM
So my elderly mother sold her house in 2018 and got a lump sum. I did advise her to open a vanguard account and she did, but found out just 3k is is in there, while the rest of the money (I'm not sure how much exactly, 150-200k) she has in her savings account (no other assets other than car signed over to my sister). She lives with my brother and also receives 2k/month after my father died this past year, so generally does not need to touch it at this time. Two questions. 1) how to best have her reintroduce that money in the stock market, given that she is old and the market is high, and 2) she doesn't have a will but wants to make sure it goes to her kids upon death without going through probate. Any suggestions? Anything big I'm overlooking? I am thinking for savings having the kids be named on the account, payable on death is sufficient (and she already did). For retirement/brokerage account thinking she simply needs to fill out beneficiary form. I do know it is more complicated than that, but these are first steps. We also want her to write out her medical directive and also wishes for funeral, but those are uncomfortable to her so not done yet.
Title: Re: Help my Mom with her retirement
Post by: mozar on March 20, 2021, 10:34:40 AM
From an emotional perspective, if she wants to keep her money in a savings account, let her, it's her money.
Title: Re: Help my Mom with her retirement
Post by: Catbert on March 20, 2021, 10:44:39 AM
From an emotional perspective, if she wants to keep her money in a savings account, let her, it's her money.
+1
Pay on death and beneficiary designations should be fine.  As a minimum though she should get a springing power of attorney for financial matters so someone can handle her financial stuff if she's incapacitated for any reason.  Health care POA could be critical also if you and your sibling(s) might disagree on what to do.
Title: Re: Help my Mom with her retirement
Post by: partgypsy on March 20, 2021, 12:36:15 PM
Thanks. I think a power of attorney would be helpful, as well as medical advanced directives. My late father did have medical advanced directive but otherwise things were not written down; we had to guess at his wishes. I don't want to have to go through that again.
Title: Re: Help my Mom with her retirement
Post by: ysette9 on March 20, 2021, 03:31:23 PM
Will she get $2k monthly indefinitely and does it cover her needs?

If she is ok with doing something with her money then keeping a nice cash cushion ($10k?) in savings and then putting the rest in a balanced fund or equivalent would be reasonable. Maybe 50/50 VTSAX/VBTLX or the Wellesley fund for simplicity. Heck, she could probably even go 60 or 70% bonds if she is uncomfortable with volatility and still get some reasonable growth.

As for the market timing question (“how should I invest when the market is ____?”) Vanguard’s white paper says you are best off doing a lump sum investment over dollar cost averaging. If you are asking about what to invest in based on what the market is like, that requires a magic crystal ball to see the future, which none of us have. So the best bet is to pick and stick to something reasonable able.

https://static.twentyoverten.com/5980d16bbfb1c93238ad9c24/rJpQmY8o7/Dollar-Cost-Averaging-Just-Means-Taking-Risk-Later-Vanguard.pdf
Title: Re: Help my Mom with her retirement
Post by: moneypitfeeder on March 20, 2021, 06:24:23 PM
My mom is big on "no probate" and she has a large portion in secure--can't make less than (XYZ) but can make more due to the market--IRAs that are directly payable to me and my siblings. She still is keeping a large amount in her checking/standard savings, but she is happy with what is earning versus what is is holding steady. When she is ready we will add me to her checking/savings account so I can make payments for her from it or disperse it when necessary like we did when she was added to my grandmother's accounts. So far her only gripe with the IRAs has been the gov makes her take a certain amount out every year, even if she has no need for it.
Title: Re: Help my Mom with her retirement
Post by: partgypsy on March 20, 2021, 06:35:16 PM
The 2k a month is from social security so yes for rest of life. right now it is enough bc she lives with my brother. But who knows for future.