Casey TableTennis said:

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After guaranteed income (I.e SS and pension), what % of assets will be withdrawn in a normal year to cover expenses?

Has she ever invested before?

Is she likely to make it through a market downturn without getting overly scared/pulling the ripcord on the investment strategy?

Does she have LTC coverage? If not, what is plan if she needs care beyond what your family can handle?

Are there legacy objectives or any other factors that would influence decision making beyond herself?

If she exhausted her resources late in life, could/would the family kick in enough to provide her flexibility of choice in care/housing decisions, and the quality/dignity she would desire?

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Ags2013 said:

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Casey TableTennis said:

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After guaranteed income (I.e SS and pension), what % of assets will be withdrawn in a normal year to cover expenses?

Has she ever invested before?

Is she likely to make it through a market downturn without getting overly scared/pulling the ripcord on the investment strategy?

Does she have LTC coverage? If not, what is plan if she needs care beyond what your family can handle?

Are there legacy objectives or any other factors that would influence decision making beyond herself?

If she exhausted her resources late in life, could/would the family kick in enough to provide her flexibility of choice in care/housing decisions, and the quality/dignity she would desire?

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Thanks for the thoughtful comments from everyone.

Her expenses are very minimal. They will be limited to pretty much her food. She has her monthly benefits she can live off of.

She has never invested before and probably would be scared if we saw a market downturn. My advice to her would be to not check it regularly since the market can be fickle but generally sees 10-14% increases.

No LTC that I know of. Should probably have her look into that. As of now, she is very much able-bodied but need to plan for the next few years.

No legacy objectives. Decision making would be made by her but would be influenced by my wife and I as we have her best interest (hence why she's living with us).

The family doesn't really have any resources. However, we are making every effort to give her that housing flexibility in our home. Luckily my wife is both a hospital nurse as well as a home health nurse so she has the ability to help take care of her.

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$30,000 Millionaire said:

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Fidelity and vanguard have financial products explicitly for this situation. Look into $VTINX

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ehrmantraut said:

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hedge said:

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Annuity

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Really bad advice

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one MEEN Ag said:

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This might piss some people off here, but here it goes.

When you think of long term care, you need to plan to get all assets out of her name. Medicare and Medicaid examines net worth as far back as the last five years. So that means those conversations need to start today.

Its not right, but LTC will absolutely drain the average elderly person to penniless. My grandparents were 8k a month a piece when they were put in a long term care facility. Their remaining assets quickly dwindled and they got moved to the medicare wing (which was only a moderate step down in facilities). They worked their whole lives on meager wages and victory gardens to see it all wiped out in a year and a half. Their heirs never once cared about an inheritance, but it was definitely demoralizing to see all that was left of my grandparents to bless their children with were the cash in my grandmother's purse and the keepsakes that got distributed before LTC.

Medicare will pay for a very short period of care at a LTC, then your grandmother in law will be on the hook until she is penniless, and then she'll apply for Medicaid and get some LTC care that is hopefully within the same facility.

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ehrmantraut said:

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Tell him to stop letting the tax tail wag the dog. Everyone hates taxes. If it's hard for him to stomach paying a 15% tax on only his gains, imagine what his stomach will feel like when his entire account drops 15%+ because he didn't rebalance and diversify.

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ehrmantraut said:

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Tell him to stop letting the tax tail wag the dog. Everyone hates taxes. If it's hard for him to stomach paying a 15% tax on only his gains, imagine what his stomach will feel like when his entire account drops 15%+ because he didn't rebalance and diversify.

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classof2019 said:

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ehrmantraut said:

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Tell him to stop letting the tax tail wag the dog. Everyone hates taxes. If it's hard for him to stomach paying a 15% tax on only his gains, imagine what his stomach will feel like when his entire account drops 15%+ because he didn't rebalance and diversify.

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I talked to him at lunch about it some....he agreed to some extent. I also brought up selling the rental property.

His argument was what if sells them and puts that money into the market...and market goes down 20%...he lost that value and has zero monthly income off of them.

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one MEEN Ag said:

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classof2019 said:

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ehrmantraut said:

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Tell him to stop letting the tax tail wag the dog. Everyone hates taxes. If it's hard for him to stomach paying a 15% tax on only his gains, imagine what his stomach will feel like when his entire account drops 15%+ because he didn't rebalance and diversify.

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I talked to him at lunch about it some....he agreed to some extent. I also brought up selling the rental property.

His argument was what if sells them and puts that money into the market...and market goes down 20%...he lost that value and has zero monthly income off of them.

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I think a bigger question is how does he plan to convert his investments into the cash for what he needs for the next 30 years?

Is he thinking he's just going to use the rental money and then dip into the investments when necessary? Is he mentally okay with selling off 4k a month in investments to pay for his lifestyle? Thats a big physical hurdle. Does he want to try to invest in dividend stocks that do that automatically for him?

It seems he really likes the monthly dividend created by his rental properties. He doesn't have to sell and just sit in cash, he just needs to find some way to match his age related risk and cash needs.

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halfastros81 said:

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I presume some
Of his energy holdings are in Tax deferred accounts like 401k 's or ira's. He can sell within the account and reduce his over exposure and reduce risk without paying any taxes in those. Also don't understand his fascination with the brackets since only the amount over the top
Of the bracket is subject to the higher tax rates.

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Casey TableTennis said:

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halfastros81 said:

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I presume some
Of his energy holdings are in Tax deferred accounts like 401k 's or ira's. He can sell within the account and reduce his over exposure and reduce risk without paying any taxes in those. Also don't understand his fascination with the brackets since only the amount over the top
Of the bracket is subject to the higher tax rates.

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Hyper focusing on tax brackets is generally destructive of wealth in my opinion. However there are very narrow bands where it is absolutely worth managing. An example is if a little more income kicks you into a higher band of surcharges for IRMAA on Medicare premiums. QBI phaseout is another where tax impact can be much higher than the marginal bracket. These aren't too common, but having awareness is useful so income avoidance can be managed.

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Ags2013 said:

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$30,000 Millionaire said:

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Fidelity and vanguard have financial products explicitly for this situation. Look into $VTINX

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Thank you! This is exactly what I was looking for.

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