My parents asked me for their help on investing their money.
They are a Retired couple, aged 67
totally debt free including the home
right now living basically off social security, a $500 month pension and severance from their old jobs which will run out soon. They figure they will need to pull an additional $1000 a month fairly soon here. They really don't spend money on much besides necessities.
They do not want to go the planner route. Their planner is in his 80s and really is inactive as he just keeps the accounts for something to do. They'd likely keep the money with him, but I suggested moving the IRA money so it'd be easier to manage.
Most other brief conversations they had with planners have wanted them to put money into managed accounts paying 1-1.5 points.
Their portfolio is as follows:
Stock index funds non qual: $100k
Joint account "A" share mutual funds with a planner split around 60/40 bonds to stocks: $100k
IRA's"A" share mutual funds with a planner split around 60/40 bonds to stocks: $300k
401k rollover that never got invested: $200k
They "don't want to risk their money"and they want to "have it in something safe". We talked to one of the "planners" at Vanguard and he suggested at least 30% stocks. I would suggest more, but I know they won't go for it.
I am thinking the non qualified accounts will stay as is, so there's no tax consequences. The rest I was thinking ETF's, so something like
1) 60% BND which I think yields 2.7%
2) 10% XLU which is around 4% (I consider this more of a bond equivalent)
3) 30% maybe something like SPY or DVY for 3.2% ish
This should yield them enough money to live off the interest with some left over.
My concern is interest rates and bonds being in somewhat of a bubble. Once they buy, they will stock with an investment.
Any feedback or suggestions are appreciated.
They are a Retired couple, aged 67
totally debt free including the home
right now living basically off social security, a $500 month pension and severance from their old jobs which will run out soon. They figure they will need to pull an additional $1000 a month fairly soon here. They really don't spend money on much besides necessities.
They do not want to go the planner route. Their planner is in his 80s and really is inactive as he just keeps the accounts for something to do. They'd likely keep the money with him, but I suggested moving the IRA money so it'd be easier to manage.
Most other brief conversations they had with planners have wanted them to put money into managed accounts paying 1-1.5 points.
Their portfolio is as follows:
Stock index funds non qual: $100k
Joint account "A" share mutual funds with a planner split around 60/40 bonds to stocks: $100k
IRA's"A" share mutual funds with a planner split around 60/40 bonds to stocks: $300k
401k rollover that never got invested: $200k
They "don't want to risk their money"and they want to "have it in something safe". We talked to one of the "planners" at Vanguard and he suggested at least 30% stocks. I would suggest more, but I know they won't go for it.
I am thinking the non qualified accounts will stay as is, so there's no tax consequences. The rest I was thinking ETF's, so something like
1) 60% BND which I think yields 2.7%
2) 10% XLU which is around 4% (I consider this more of a bond equivalent)
3) 30% maybe something like SPY or DVY for 3.2% ish
This should yield them enough money to live off the interest with some left over.
My concern is interest rates and bonds being in somewhat of a bubble. Once they buy, they will stock with an investment.
Any feedback or suggestions are appreciated.
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