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Started By
Message
Elderly family member asked me for advice on what to do with his money.
Posted on 10/10/13 at 10:41 am
Posted on 10/10/13 at 10:41 am
I have an elderly (86 years old) family member who asked me what I thought he should do with his money. He's living in a retirement community and hasn't had any debts of any type in decades. He has all of his money in CDs that draw a dreadfully low amount of interest. He has more than enough to live comfortably for the rest of his life but he wants to put his money into something safe that is better than CDs. Any thoughts?
8
Posted on 10/10/13 at 10:45 am to Haughton99
First thought - Keep it in CDs
Follow up questions:
1.) how much is it
2.) kids and grandkids?
Generally speaking, I avoid giving money advice to relatives...
Follow up questions:
1.) how much is it
2.) kids and grandkids?
Generally speaking, I avoid giving money advice to relatives...
This post was edited on 10/10/13 at 10:48 am
Posted on 10/10/13 at 10:53 am to nelatf
Ya, its pretty hard to give advice on what to do with money if the person with it doesn't share what he wants to do with it.
If he wants to pass it on, I'd imagine the first thing he should do is start maxing out his annual gifting exemption.
If he wants to pass it on, I'd imagine the first thing he should do is start maxing out his annual gifting exemption.
Posted on 10/10/13 at 11:49 am to Teddy Ruxpin
quote:
annual gifting exemption
for sure this
If he's solely looking for income though, just buy some high dividend stocks. For short term it makes sense if he doesn't care what happens to principle investment.
Posted on 10/10/13 at 12:08 pm to Teddy Ruxpin
quote:
If he wants to pass it on, I'd imagine the first thing he should do is start maxing out his annual gifting exemption.
depends, is the amount he has less than than 5 million threshold for estate taxes, if so keep his money and let the kids or whoever fight it out after he is dead and gone and for sure will not need it any more
I agree with above, just keep it in CD's, at his age he needs no risk, and making extra money is not going to really benefit him, play it safe
This post was edited on 10/10/13 at 12:09 pm
Posted on 10/10/13 at 12:16 pm to Haughton99
Get him to meet with someone that specializes in that. Estate planning is often overlooked by the elderly when it is vitally important.
I'd research it for him and get the fin planner you choose to go meet him at the retirement community. Offer to and sit with them during the meeting or to be a middleman.
I'd research it for him and get the fin planner you choose to go meet him at the retirement community. Offer to and sit with them during the meeting or to be a middleman.
This post was edited on 10/10/13 at 12:18 pm
Posted on 10/10/13 at 12:19 pm to Haughton99
Be very careful.
Your elderly family member's heirs can go against you after his passing if they believe they can prove you gave poor investment advice to him or if you benefited financially to their detriment.
There have been numerous court cases similar to the circumstances you are in and you might be in a no-win situation no matter how well intentioned you are.
Your elderly family member's heirs can go against you after his passing if they believe they can prove you gave poor investment advice to him or if you benefited financially to their detriment.
There have been numerous court cases similar to the circumstances you are in and you might be in a no-win situation no matter how well intentioned you are.
Posted on 10/10/13 at 1:34 pm to Haughton99
If he's 86. CDs are the way to go IMO.
Posted on 10/10/13 at 1:44 pm to Camp Randall
Eh...especially if the point is to ensure something can be passed on, I am a big proponent of the notion of never ever leaving the equity market.
By all means, dip it to 40% or even below 30% of your portfolio, but you are just missing out on money letting a huge lumpsum of cash sitting in CDs.
All you really *need* to have is a couple of years worth liquid, and a couple of years more in an intermediate investment like bonds.
Even if the rest of the equity is in just dividend paying stocks that you cash the dividends of, that is better than CDs IMO.
By all means, dip it to 40% or even below 30% of your portfolio, but you are just missing out on money letting a huge lumpsum of cash sitting in CDs.
All you really *need* to have is a couple of years worth liquid, and a couple of years more in an intermediate investment like bonds.
Even if the rest of the equity is in just dividend paying stocks that you cash the dividends of, that is better than CDs IMO.
This post was edited on 10/10/13 at 2:10 pm
Posted on 10/10/13 at 1:46 pm to Haughton99
Keep it in CD's or paid for real estate that generates cash flow. RE would not need to be over 20% or so of his net worth, even that might be a little high.
And by real estate I don't mean to go build something where he could be exposed to construction costs, delays, etc. Property that is already built and could bring in renters/tenants with little to no effort.
And by real estate I don't mean to go build something where he could be exposed to construction costs, delays, etc. Property that is already built and could bring in renters/tenants with little to no effort.
This post was edited on 10/10/13 at 1:50 pm
Posted on 10/10/13 at 2:46 pm to LSU0358
How much money does he have at this point? And what would he do with more? If he is not likely to spend all the money he has, and is not in a position to significantly change his lifestyle by making more money (and assume the additional risk), the hell with the headache and the risk, keep it in CD's
Posted on 10/10/13 at 2:53 pm to Haughton99
quote:
Any thoughts?
Have him give it to me and I'll cut you in for half.
j/k
Have you thought about the better dividend stocks?
Pretty much any of these companies will outperform CDs, in some cases substantially.
Dividata's Top Rated Stocks
At his age, ya'll might want to consult with trust people to determine the correct vehicle - you'll still have some flexibility in the risk/reward/yield areas.
This post was edited on 10/10/13 at 2:54 pm
Posted on 10/10/13 at 3:04 pm to Haughton99
My last advice to my grandmother.. who lived through the depression and scrimped and saved and had a 7 figure portfolio (how, I'll never know)...
Grammy, it's your money. Enjoy the hell out of it.
Grammy, it's your money. Enjoy the hell out of it.
Posted on 10/11/13 at 3:45 am to Meauxjeaux
quote:
Grammy, it's your money. Enjoy the hell out of it.
I tell my parents all the time to spend "my inheritance" from them on themselves and to not worry about leaving something for me. I told them they gave me my inheritance when they put me through school all those years ago.
Posted on 10/11/13 at 1:45 pm to Camp Randall
quote:
If he's 86. CDs are the way to go IMO.
Advising an 86 year old to invest in anything other than CD's or some super safe stock that pays regular dividends is just asking for a lawsuit down the road.
Posted on 10/11/13 at 5:29 pm to Haughton99
Can't believe no one has suggested hookers and blow.
So this is what life is like away from the OT?
So this is what life is like away from the OT?
Posted on 10/11/13 at 10:12 pm to RC
quote:
So this is what life is like away from the OT?
Not quite, we have lost some members as of late (Vols&Shaft in particular) that would supply this response in an MT thread.
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