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Investment Option for 60 yr old?
Old 12-28-2010, 12:25 PM   #1
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Investment Option for 60 yr old?

Hi,

My in-laws are in their early 60s and have about 200k in rollover ira. This is their only retirement money so it needs to be invested conservatively. They don't want anything more than 10% dip. Also, they're not interested in diversifying on their own so it'll have to be a balanced fund.

What do you think their options are? I was thinking about putting 100% into wellsely fund but that's putting everything into one fund so not sure if it's too risky and allocation seems to favor large cap stocks. Retirement fund seems ok. Anything else?

Thanks
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Old 12-28-2010, 12:34 PM   #2
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If you want "very conservative", Vanguard's TIPS fund.
It protects their principle against CPI increases, which may be a big deal for people who lived through double digit inflation. Of course, from a safety perspective we used to assume the US gov't would never default on its debts - that may not be the case anymore.
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Old 12-28-2010, 12:42 PM   #3
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IRA = tax efficiency doesn't matter. I would suggest Vanguard Lifestrategy Income fund if they really don't want to lose more than 10% in a given year. Maybe mix that with some Vanguard Lifestrategy Conservative Growth (which lost 19% in 2008 but almost made it all back in 2009, and otherwise only lost money 2x since 1994).

These two funds hold 20% and 40% in equities, respectively.
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Old 12-28-2010, 12:45 PM   #4
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you can do fine with any of the major no load fund companies --- seems that Vanguard comes up often here

the main thing with "inlaws" is that I would make sure it is their choice

you don't want to be putting them into anything --- you are helping them select from different options --- and they make the selection
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Old 12-28-2010, 01:39 PM   #5
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They can and should choose the fund(s).

But Vanguard has rock bottom fees and a good reputation.

When do they intend to begin using the funds? Is the money just an emergency reserve fund or do they intend to spend some of it every year? If they intend to spend it yearly, how much of it do they intend to use per year?


BTW... Another thread in the forum recommended Otar's books on the subject of managing retirement finances. It can be downloaded here for free for a limited time in pdf format. Click on the free download link to get to the page where you can access the book.

IMO - It is a worthwhile read.
otar retirement calculator
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Old 12-28-2010, 03:14 PM   #6
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Thanks everyone.

I'll look into lifestrategy funds. Yes, very important to make sure decision is up to them. I'm trying to gather info to show to them so, any other options or opinions on current options, please let me know.

They will use this money probably between $500-$1,000 per month.
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Old 12-28-2010, 05:44 PM   #7
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Quote:
Originally Posted by HatePayingTaxes View Post
Thanks everyone.

...
They will use this money probably between $500-$1,000 per month.

Read Otar's book... he has a good section on portfolio sustainability at different WR%.
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