How should I invest $13k for a healthy 74 year old?

[shanaling]

My father in law has $13k. He doesn’t have any anticipated large expenses. Everything is covered by insurance or government subsidies/food stamps. Putting the money in today’s savings account would just lose value over time. How should he invest/save his money?

[achvfi]

Assuming there are no other piles of money, he can just use it as an emergency fund in a savings account. I dont see a point in investing in risky assets.

[PDXTabs]

Yes, this is the important question. How much of an EF does he have, is this it? I might be willing to keep a $10K EF and invest the rest in, say, VT.

[shanaling]

He doesn’t have other piles of money, unfortunately. Our plan was to put in EF but I just want to optimize for him. He is healthy and may see his money lose value in the next 10-20 years. But seems like EF is the way to go.

[PDXTabs]

He doesn’t have other piles of money, unfortunately. Our plan was to put in EF but I just want to optimize for him. He is healthy and may see his money lose value in the next 10-20 years. But seems like EF is the way to go.

Putting 10~50% of it into an index fund might make sense to balance all the risks, that is, the risk of inflation vs the risk that he needs to use it.

[BicycleB]

He doesn’t have other piles of money, unfortunately. Our plan was to put in EF but I just want to optimize for him. He is healthy and may see his money lose value in the next 10-20 years. But seems like EF is the way to go.

Putting 10~50% of it into an index fund might make sense to balance all the risks, that is, the risk of inflation vs the risk that he needs to use it.

For a can't-lose option, you could put 10k into i-bonds (if he's a US citizen). He wouldn't gain money in real terms, but it would be inflation protected and government guaranteed.

Overview:
https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

Interest rates (bonds purchased now basically have interest at the rate of inflation):
https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm

A website discusses i-bonds:
https://www.thebalance.com/i-bonds-best-safe-investment-you-can-make-2388902

[shanaling]

Great idea!

[BicycleB]

If he were my relative, I'd put 5k in the first year. Once that's "seasoned" (available for withdrawal), I'd put in the other 5k. That way more money is available during the seasoning process. Interest lost would only be about 5,000 x 1.68% = $84. Just a thought.

[shanaling]

Thanks!

[Paul der Krake]

Don't invest it.

Your relative is in deep in the fourth quarter, down 30 points, and no timeouts remaining. He's not staging a comeback. Let him enjoy his final years as best he can with whatever he has today.