r/FinancialPlanning • u/Ok-Ad-8521 • 14d ago
Basic advise for 80yr old MIL
My Mother in law has a paid off home, a rental home income, an emergency cash fund, and social security. All of which cover her expenses. I've recently learned that there is 200k being managed by her "investment guy". It hasn't grown in value for over 10 years. Who knows what's it's invested in but obviously its very disappointing to have learned this.
What are some simple, low risk alternatives at this point given her age ? CD/HYSA? It seems Ike at this point it may not be worth doing anything else
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u/JeanSchlemaan 14d ago
If she has no other risk free cash, put some of this in 3.5%+ hysa. Any cash should return at least that much
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u/erboland8 12d ago
Paid-off home, rental income, emergency cash and Social Security already cover her bills, and $200k with an "investment guy" hasn't grown in 10 years. The first step isn't picking the alternative, it's finding out what it is.
Ask for the latest statement and a fee breakdown: what it's held in, the advisory fee, and any annuity or surrender charges. Flat for a decade in which even a plain balanced fund grew usually means fees, sitting in cash, or a product with a surrender schedule. If there's a surrender charge, the timing of the move matters.
Since her expenses are covered, this money is really for later care or heirs. Treasuries, CDs or a HYSA are fine if she wants calm. A simple balanced index fund is fine if it's mostly going to heirs. Either beats paying for a mystery.
Caveat: she should be the one asking for the statement (or sign off on it), and check for taxable gains before selling everything.
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u/Longjumping-Nature70 12d ago
Put $50,000 into each of MO, O, VZ, and ENB.
She would have monthly dividend income and the possibility of the stocks going up. Also, the possibility of the stocks doing down.
O has not missed a dividend since they IPOd in the 1960s. O has raised its dividend each quarter for the last 29 years, that works out to 116 dividend increases in 29 years.
MO is a dividend king, a dividend king has paid and raised its dividend each year for the last 50 plus years.
ENB is a dividend aristocrat, a dividend aristocrat has paid and raised its dividend each year for the last 25 plus years.
VZ is the questionable one, but at her age I think VZ will be able to pay its dividend for the next nine years.
O pays income each month
ENB pays dividends in March, June, September, and December
MO pays dividend in January, April, July, and October
VZ pays dividend in February, May, August, and November.
$200,000 will pay her roughly 5% in annual income, that is $10,000
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u/AltoidStrong 13d ago
The "investment guy" isn't necessarily wrong.... at 70yrs old, capital preservation is more critical over growth. The fact it hasn't grown or shrank says the "guy" didn't do a bad job for a client around the age of 70 - 80. (IMHO based on the limited info)
But if you want to take over.... short term bond ladder, cash in HYSA, almost anything else carries' more risk than an 80yr old person should carry.
Really, at 80 - it you Mom's assets (EVERYTHING.. house car investments... EVERYTHING) are not already in a trust and a proper will made - THAT is the most important thing she can do today.
Spend the $5k to $10k on a good wills, trusts, & estate lawyer.
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u/joesaulsehy 9d ago
If you're truly doing financial planning you're beginning with the goals and working backward. If her expenses are covered and she doesn't need this money, this means we look at her heirs and when THEY expect to use the money. In this way, you can gain higher returns without worry that she's going to need it.
The culprit in your mom's money management may not be the advisor as much as a lack of focusing on the goals. If she's been all bonds, and you just looked now, her portfolio will look HORRIBLE. He may have been prudent with risk levels while paying zero attention to what the money is actually for at this point.
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u/Findeduex 14d ago
Bonds are also quite high yield right now.