It’s a bit of a long/sad story but especially my mother is going to have somewhere between 200-300k after paying off her house and other things via my step fathers social security after his unfortunate passing. I’m close with my mom and i’m not worried about her blowing through it or anything, but she wants me to help her make it last. Essentially i’m looking for advice on where would be a good / very safe place to invest at least half of it so it can grow but also if needed can be retrieved. any advice is appreciated. she will be getting monthly SS and what not and won’t really need to touch much of it but isn’t good with this stuff. i have some ideas but wanted some more options
she is in her 60s as well
Need Help with Making Money Last
byu/Campbell_soup_14 inpersonalfinance
Posted by Campbell_soup_14
7 Comments
Is she 40, 50, 60, 70,80, or 90? Timeframe to making the money last could be relevant. A classic retirement portfolio is 60% stocks and 40% bonds. Allows for growth and safety. Rebalance each year when you make a withdrawal. If she’s 40 then that won’t apply. Social Security does not do payouts, just regular monthly payments. So you might be talking about an inherited IRA. She has the choice to roll it into her own or set it up asn an inherited. If she needs money from it before she’s 59.5, then inherited is the way to go. Otherwise, rollover.
What does “make it last” mean?
Need much more of a financial picture in order to provide guidance.
Income/Expenses/Assets/Liabilities.
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Sounds like you are asking about a framework for what to do with money.
Start with reviewing the Prime Directive in the PF Wiki. It will answer your question and many other questions you didn’t realize you should be asking.
* https://www.reddit.com//r/personalfinance/wiki/commontopics
Investing in safe low risk index or mutual funds that pay a dividend or distribution where she could live off of those plus the SS is what to think about and investigate.
The goal will be to not touch the 200-300K and live off of the money it produces.
You may want to start with this training to help: [https://www.fidelity.com/viewpoints/personal-finance/how-to-start-investing](https://www.fidelity.com/viewpoints/personal-finance/how-to-start-investing)
Fidelity has financial advisors if you do not want to learn and do it yourself.
Retired Army here — for someone in their 60s with that kind of lump sum, I’d keep it very conservative: a mix of high-yield savings/money market for liquidity and short-term Treasury bonds for some safe growth. The goal isn’t maximizing returns at this stage, it’s making sure she can’t accidentally lose principal while still giving the money a little room to work.
You should verify the source of funds she is intending to use to pay off debts. If it is in retirement accounts, it is very unlikely that taking it in a lump sum to clear mortgage and other debt is optimal.
The nest egg should go into one of these: https://investor.vanguard.com/investment-products/mutual-funds/life-strategy-funds – her pick
Otherwise try to get expenses down so SS covers as much as possible.
If she is able to live off the social security maybe look at just doing a money market savings account. They are getting around 3.5% interest now so she would have 10k available to her every year without touching the 300k and the benefit of not entering into what may end up being a market slide that eats away her initial investment.