80 years old - 100k

Buy her a balanced mutual fund and let her take the $300that she needs from it on a monthly basis. A decent fund should grow 5-7%/yr and she would only be drawing about 3.6%/yr so the fund should grow a little. You can use this strategy as long as she lives and if we get a strong sustained market, she could even give herself a raise at some point. The fund will prob go below $100K at some point but unless the market goes way down and stays there, the fund will rebound.

$300/month for a decade is $36k which leaves her legatees a total of $64K. I understand her wishes but why not have her draw the extra money out and just live with no risk whatsoever? She could live to 108 or so before she worried about exhausting her nest egg.

I understand her motivation to take care of her family. But are they in dire straits if they don’t get every dime of her potential estates and assets or something?

my thoughts too her kids are probably 50+ years old and 100k split up isn't that much money

I would tell her to invest most but to also not stop living or to start living go see some places

If you have a good relationship with her, kindly point out that her money will likely be needed to take care of her....and that her legacy to her heirs is in her values, knowledge, skills, love that she has already passed down. Her self sacrificing attitude is lovely and commendable, and her peace of mind should absolutely come first. Find a CD or higher yield jumbo savings rate that will produce minimal income, and sit with her and show her how much it will grow (not much). Also show her the drawdown if she uses $350 a month....how long it will last if she lives to 100. Point out that she deserves to use her money on herself at this stage in life....that all of her kids are employed (hopefully) and would rather see her comfortable and cared for (hopefully also true).

Forget the annuity.

You may want to consider that the $300 requirement will likely grow over time - at least 1.5-2.5% each year.

You can get most of that in Tbills now. 2% or so. Go to treasury direct and buy them there with no commissions.

You want her to keep that money to care from herself.

She could do her own kind of reverse mortgage too by selling her home to her kids in exchange for a note and the kids could pay her $300 a month against the note. When she dies they can sell the house.

Great point about the potential for long term care...but this isn’t always a consideration. If your family is fairly functional, there are myriad ways to care for an elder that do not require an institution. I just hate to hear of it spoken of as an inevitability....it’s not.

So this is another opportunity to talk with her before it becomes a necessity: would she prefer to stay in her own home (assuming she owns it), to live with a family member, to live in a supported assisted living apartment, or to have a family member move in with her? Since you’re talking about money, it is a natural thing to bring up. You should listen to her, and help her communicate her wishes to her children. Also discuss a durable power of attorney—who does she want making decisions on her behalf? Convos now about this stuff may ease her mind and make he next decade of transition easier for the whole family.

She should spend every dollar of that money she worked hard to save. Just my 2 cents.

I hear what you are saying and fully agree, but if she wants to leave money for her kids then that is her preference. I'm sure she will feel better knowing she left them something.

OP, I second tying most of it in a CD - have her deduct $15,000 to cover her expenses for the next couple of years and tie the rest into CDs if she is looking for low-risk.

Coke stock and take the quarterly dividends.

Boom.