My father-in-law is about to get a lump sum of money from his pension due to his company being bought out. He is looking to use about 75% of the money in about a year when he reaches 59.5. Any advice on what to do with the money? He would like to limit risk and hopes get a better return than he would get in just a money market account.

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Posted by Jag_Warrior

Virginia

Member since May 2015

4099 posts

Posted on 3/12/16 at 1:26 pm to cdl2006

You mean that he's going to use 75% of it to invest or purchase something?

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Posted by Joshjrn

Baton Rouge

Member since Dec 2008

27068 posts

Posted on 3/12/16 at 2:46 pm to cdl2006

Risk is priced into returns. If he can't tolerate risk, he should enjoy the 1% Ally is offering him.

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Posted by cdl2006

SCP

Member since Nov 2007

311 posts

Posted on 3/12/16 at 4:04 pm to Jag_Warrior

It all has to be rolled into an IRA until he is old enough to take a distribution without penalty. That will be about a year. At that point, he plans to withdraw about 75% of the money. I am not sure how much he is getting, but I would guess it is somewhere around $50k. Just trying to see if money market is the best route to go since it will only be a year or if there are any other vanguard type funds that are low risk.

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Posted by Jag_Warrior

Virginia

Member since May 2015

4099 posts

Posted on 3/13/16 at 10:46 pm to cdl2006

He just wants to park the money for a year, so yes, a money market fund is his best bet for the 75% that he's going to ultimately withdraw. If he wants to invest the remaining 25% for 3-5 years (at least), then he could look at stock, bond or balanced funds.

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