Author Topic: Parents need investment advice  (Read 1661 times)

FarmerAl

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Parents need investment advice
« on: January 20, 2017, 01:23:38 PM »
My parents are 62 and are getting very close to retiring within the next few years. My dad has had goodluck over the years picking stocks and making some good money. But now that he is ready to retire he wants to pick a more relaxed approach.

I was an investment advisor for a few years so he wants my opinion. He has a pretty good sum of money to invest. My opinion on investing has changed drastically since I was an advisor because the firm I was with charged fees of 2.25% which I now realize is insane.

My initial thoughts are to use Vangaurd Index Funds like VTSAX and other funds that have very low expenses.
He has about half in Roth and half in Traditional IRA.
Does anyone have thoughts? Any help is appreciated.

SeattleCPA

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Re: Parents need investment advice
« Reply #1 on: January 20, 2017, 04:18:24 PM »
I recommended the Vanguard Target Retirement Income Fund for my parents (who are in their eighties)...

I really just wanted my dad to "set it and forget it" because he was regularly tempted to do stuff where he was essentially reaching for yield or applying concepts three decades out of date.

2Birds1Stone

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Re: Parents need investment advice
« Reply #2 on: January 20, 2017, 04:42:45 PM »
Keep it as simple as possible. A low cost Vanguard target date fund or 2-3 fund portfolio would be perfect. If you worry about them/or you tinkering with the portfolio based on market movements it might be worth using Vanguards PAS.

robartsd

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Re: Parents need investment advice
« Reply #3 on: January 20, 2017, 05:27:06 PM »
My initial thoughts are to use Vangaurd Index Funds like VTSAX and other funds that have very low expenses.
He has about half in Roth and half in Traditional IRA.
Does anyone have thoughts? Any help is appreciated.
Can't go wrong with a simple portfolio of 2 to 4 low expense index funds (VTSAX, VBTLX, VTIAX, and VTABX).

If simpler than that is desired - chose one of Vangaurd's pre-mixed 4-fund portfolio funds: Target Retirement (2015 or 2020) or LifeStrategy (Income or Conservative Growth).

Vanguard Managed Payout Fund (VPGDX) makes retirement investments simpler still - automatic monthly disbursement based on fund value at the beginning of each year.

Another Reader

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Re: Parents need investment advice
« Reply #4 on: January 20, 2017, 06:18:17 PM »
What investments are suitable for your parents depends on the type of investment accounts they currently have and what their sources of income will be when they retire.  Are they relying on 401 (k) and IRA funds?  Do they have pensions?  Social Security?  They need to plan their retirement income out and use some of the retirement calculators to see what makes sense.  At their age, a more relevant forum would be early-retirement.org, where these topics are discussed in detail.

Mighty-Dollar

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Re: Parents need investment advice
« Reply #5 on: January 20, 2017, 10:08:44 PM »
These index funds automatically rebalance... VASIX, VASGX, VSCGX
Using a combination of two you can achieve your desired allocation ratio.

Ryland

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Re: Parents need investment advice
« Reply #6 on: January 21, 2017, 05:41:34 PM »
+1 to this
Quote
Can't go wrong with a simple portfolio of 2 to 4 low expense index funds (VTSAX, VBTLX, VTIAX, and VTABX).

If simpler than that is desired - chose one of Vangaurd's pre-mixed 4-fund portfolio funds: Target Retirement (2015 or 2020) or LifeStrategy (Income or Conservative Growth).

Here's a great post by Jim Collins about asset allocation. It talks about effort, simplicity, etc. I think all the things you're looking for. Should be a very helpful 5 minute read.

http://jlcollinsnh.com/2014/06/10/stocks-part-xxiii-selecting-your-asset-allocation/

Good luck! And let us know what you decide and how it goes!

FarmerAl

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Re: Parents need investment advice
« Reply #7 on: January 22, 2017, 09:00:34 AM »
Thank you for the help everyone. I hope to speak with my parents today on this topic.
I will have them read the JJ Collins article and that should be a lot.

Thanks!