#RetirementPlanning #InvestingTips #FinancialAdvice
Assessing the Situation
First and foremost, it’s important to understand your mom’s financial situation before making any recommendations. Take stock of her current assets, including her savings account balance, 401K, and any other investments she may have. Knowing where she stands will help you determine the best course of action for her retirement planning.
Consulting with a Financial Advisor
Considering your mom’s risk-averse nature, it may be beneficial to consult with a financial advisor who specializes in retirement planning. They can provide personalized recommendations based on your mom’s financial goals, risk tolerance, and timeline for retiring. A financial advisor can help create a diversified investment portfolio that aligns with your mom’s comfort level with risk.
Exploring Low-Risk Investment Options
For someone like your mom who prefers to avoid high-risk investments, there are still plenty of low-risk options available that can help her money grow over time. Some recommendations to consider include:
– High yield savings accounts: These accounts typically offer a higher interest rate than traditional savings accounts, allowing your mom to earn more on her money without taking on significant risk.
– Certificates of Deposit (CDs): CDs are another low-risk option where your mom can lock in a fixed interest rate for a certain period of time. While the returns may not be as high as riskier investments, CDs provide a stable and secure way to grow her money.
Creating a Balanced Portfolio
While it’s important to prioritize low-risk investments for your mom, diversifying her portfolio can help protect her money against market fluctuations. A balanced portfolio may include a mix of stocks, bonds, and other assets to ensure steady growth while minimizing risk.
Regularly Reviewing and Adjusting Investments
As your mom approaches retirement, it’s crucial to regularly review and adjust her investments to ensure they align with her financial goals. Rebalancing her portfolio as needed can help protect her savings and maximize returns over time.
In conclusion, while your mom may be starting her investment journey later in life, there are still plenty of opportunities to make her money work for her. By working with a financial advisor, exploring low-risk investment options, and creating a balanced portfolio, your mom can set herself up for a comfortable retirement. Remember to regularly review and adjust her investments to ensure they continue to meet her needs as she transitions into retirement.
HYSA, CD ladder, possibly bonds. Someone at retirement with that amount of money shouldn’t be in the stock market unless social security will pay for 100% of her living expenses which would allow her to weather a downturn of 3+ years.
$250k is nothing to retire on and probably shouldn’t be put into anything riskier than a bond tbh.
Impossible to answer intelligently without more information. What is her income like? Social security? How about monthly expenses? I assume no other debts? Health? Goals for this 200k?
High yield t bills right now for the next couple years.
>She wants to retire soon
Can she afford to retire?
>She’s risk adverse so any recommendations should probably keep that in mind.
If she’s very risk averse and coming from a 40-year cash account, CDs might be appropriate.
Remember, if you break it, you own it.
If she is still working, consider having her increase her retirement account contributions (401k and/or IRA) and use some of the cash savings to live on. It’s a way of essentially transferring the money into those tax advantaged accounts, and at her age she has a higher max contribution than younger people.
Then invest (conservatively) within the retirement accounts, where she won’t pay capital gains taxes.
Index funds
Find a professional who can guide her investments based on her goals.
I feel like no one’s really being helpful. CD or HYSA is prob best option, but other than you just need her expenses and SS income. She could be fine or could not be. Also for all we know you forgot to mention she owns a home worth $1.5mm.
Try this: 25% SPY, 50% stacked treasuries (1-5 yr maturities) and 25% monthly annuity. She needs a lower risk element that you. Schwab can help you set up.
Put into a high rate CD, while they are still around. I have one at 5.4 apy. Safe, good interest.
I get why people are suggesting hysas and bonds, but 5% growth for someone already in her 70’s is not retirement money on a base of $200k.
At this point, I think maybe eke out some gains around the edges in bonds/hysa, look into extremely lcol areas, maybe even internationally, or set her up in your place.