Bogleheads.org

I've gotten really great advice here and have been reading a lot and learning. Thank you.

Now for my mom, this is not complex but what is below is all estimates (although I believe close):

Age: 72 & Single (divorced)

Annual pension, SS, interest: 56k
Annual expenses: 50k

State: CA (north San Diego area)

No debt

Good health now but 2x cancer survivor

Owns condo with HOA fees paying for all outside maintenance (roof, siding, mowing, etc..)

Will likely buy a new car in next 2-years, I’m sure it will be a Honda Accord. No other known large expenses upcoming.

No known IRA’s. About 350k in savings, all taxable. It’s now all in CD’s and Money Markets (I don’t know specifics of where, but multiple places).

She does prefer a brick-n-mortar but is not willing to pay for any financial advice.

I will be visiting soon and will likely ask a few more specifics as she wants advice but…..still may be unwilling to move out of CD’s and MM. I need to confirm if she has LTCI or not. Her father died 45 years ago but her mother lived to age 96 with some mental health issues along the way.

The main question is, what to do with her savings?

If she needed the $350k to last, we would recommend 20% or maybe 30% stocks to assist with keeping up with inflation.

Her basic living expenses are covered, so keeping the $350k in CDs/MM is probably just fine.

Using a 20-25 year horizon, she can likely take out ~4+% each year to supplement her other income.

fuddbogle wrote: ↑Mon Jul 29, 2019 4:03 pm The main question is, what to do with her savings?

Is most of her current income tied to a COLA via inflation? I know SS is, but is the pension? If so, then I would keep it pretty near where she has it if that is her comfort level. She doesn't need the money in her current situation, so I would just ensure her stress level is optimal.

What are her goals? If she wants security, I would stay the course. If she wants to pass on to heirs and can stomach volatility, I might gradually invest a little in stocks as the CDs mature.

Regarding the condo, sometimes when HOAs have to do something major like a roof they levy an assessment on every owner, which is not insignificant..

megabad wrote: ↑Mon Jul 29, 2019 4:47 pm

fuddbogle wrote: ↑Mon Jul 29, 2019 4:03 pm The main question is, what to do with her savings?

Is most of her current income tied to a COLA via inflation? I know SS is, but is the pension? If so, then I would keep it pretty near where she has it if that is her comfort level. She doesn't need the money in her current situation, so I would just ensure her stress level is optimal.

What are her goals? If she wants security, I would stay the course. If she wants to pass on to heirs and can stomach volatility, I might gradually invest a little in stocks as the CDs mature.

Pension has 3% annual COLA. Her goals, just keep enjoying life while she can. I don't think she's wanting a whole lot at the moment. Thanks to you and bloom. I likely recommend 20% VTI and keep the rest where it's at.

Turbo29 wrote: ↑Mon Jul 29, 2019 4:56 pm Regarding the condo, sometimes when HOAs have to do something major like a roof they levy an assessment on every owner, which is not insignificant..

I image it will creep up over time but this is a well established HOA with, at least to my understanding, a good reserve built up. They also have done some significant improvements already as her roof is less than 5-years old. It's something I'll mention as well. Thank you.