Greetings, all,
My brother's mother-in-law just died, and they are sorting out lots of details right now related to the will, estate, etc. One main thing they are trying to figure out that we'd love your advice on:
The mother-in-law has been financially supporting her youngest daughter (Kay, early 20's) recently to the tune of about $5001,000 a month. Kay is not great with money, and needs ongoing support. Rather than taking her inheritance money as a lump sum, which she may be tempted to spend unwisely, Kay is interested in investing it, so that she can have a monthly income from it to help support her. My brother has been looking into options for her and discovered the Vanguard Managed Payout Fund (
https://investor.vanguard.com/mutual-funds/managed-payout/#/). He thinks its a good candidate for what to do with her inheritance money. This fund provides regular monthly payouts, calculated for a 4% annual distribution rate.
They will have between $200300,000 to invest for her, which should equate to ≈$600925/mo. for her in terms of income.
What do you think? Is this a good option? Can you think of others that they ought to consider? The more automated it is, the better, I suspect.
Thanks for your help and wisdom!
Art