SO's parents have done very well in rental real-estate but they're not good buy and hold (equity) investors. The last time they put some in the market, in mid-2018, they panic sold in December. They're from the "buy high, sell low" school of investing.
Now that they're getting older, they're looking to lighten the real estate load. In total, after selling a few units, they'll have about $1.5M in cash. They would like to use that money for living expenses, travel, etc.
What are the options, given the conflicting goals of safety vs income?
1) A target date fund. For example, Vanguard 2020 fund which is 30/70 stocks/bonds. The 2020 fund had a 6% drop in 12/2018. Might still be too scary. :)
2) Government and municipal bonds, which almost ensures that the principal will decrease vs inflation.
3) Construct the 2020 fund with individual ETFs, so that they can see some go up while others go down. In other words, instead of seeing only a 6% drop, they'd see the equity portion drop by 20% but the bond portions hold steady or even increase.
4) Let SO control the funds and we'll make sure they get paid each month. This will allow a more aggressive allocation.
5) Annuity?
6) Move to their city and take over managing their rentals?
Any suggestions or recommendations on handling this?
Edit: They have asked us for advice.