invest for 90-yr-old

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invest for 90-yr-old

Postby hismom » Fri May 03, 2013 7:17 pm

My mother is selling her house, moving in with my sister, will have a lot of $ to invest/keep safe. She turns 90 this year, her retirement funds are gone, has only small social security income. So she will need to draw on the money from the house sale but will probably not have large expenses. Ideas for where to put the $ so it at least keeps up with inflation but not risky (given her age), and can be used as needed without penalty? Thanks, hismom (herdaughter, in this case)
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Re: invest for 90-yr-old

Postby Johm221122 » Fri May 03, 2013 7:32 pm

How much, as a percentage,does she need or want to live on?
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Re: invest for 90-yr-old

Postby Equitius » Fri May 03, 2013 7:56 pm

Are you her POA?

I'd put in in a Discover Bank Savings account and let it earn 0.8% per year. Anything else is too risky, IMO.
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Re: invest for 90-yr-old

Postby Christine_NM » Fri May 03, 2013 8:18 pm

Keep a lot in FDIC insured accounts, or insured credit union accounts (NCUA). Max is $250,000 per individual per bank. I keep the max in insured credit union accounts, and the rest in savings bonds and at Vanguard.
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Re: invest for 90-yr-old

Postby stan1 » Fri May 03, 2013 8:30 pm

CD ladders.

Let's say she is fortunate to have $200K from the sale of her house and her annual expenses will be $20K.

Here's one way to do it:
$50K - FDIC insured savings account
$50K - 1 year CD
$50K - 2 year CD
$50K - 3 year CD
After the first year restore the $50K savings account from the funds in the CD that's coming due, and put what's left into a 3 year CD. Repeat every year.

If her income needs are a higher percentage of her net worth I'd do only 1 and 2 year CDs. If there is a high likelihood she will need to go into a nursing home I'd leave more in the savings account. If she has a lot more assets you could invest some of the money with an asset allocation appropriate for her heirs.

Good luck, your mom is very fortunate to have a daughter who is able to take her in and care for her. Your mom will get much better care that way, and hopefully your sister will over time really appreciate the final time she was able to spend with her mom (although in the short term there will be periods where there is some stress). Hopefully you will be able to help your sister out and let her take some nights and weekends off, and maybe even a vacation.
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Re: invest for 90-yr-old

Postby Johm221122 » Fri May 03, 2013 8:59 pm

The only way anyone can give good advice is if we know more
viewtopic.php?t=6212
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Re: invest for 90-yr-old

Postby hismom » Sat May 04, 2013 6:11 pm

yes, I am the POA, and I'm not sure what she will need to live on, but let's say just 5% of her windfall. Thanks for your input, hismom
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Re: invest for 90-yr-old

Postby Johm221122 » Sat May 04, 2013 7:01 pm

hismom wrote:yes, I am the POA, and I'm not sure what she will need to live on, but let's say just 5% of her windfall. Thanks for your input, hismom

At 5% a simple FDIC account would be the safest optoin, but if she needed or desired more an SPIA could be considered
http://www.immediateannuities.com/infor ... rates.html
She could get 17%, but this would consume her capital but guaranteed to last a lifetime
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Re: invest for 90-yr-old

Postby Bob's not my name » Sun May 05, 2013 7:16 am

hismom wrote:yes, I am the POA, and I'm not sure what she will need to live on, but let's say just 5% of her windfall. Thanks for your input, hismom
Really? A nursing home or assisted living can cost $100,000/year, depending on where you live. For a 90-year-old, that should be in the plan.
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