I'm considering recommending one of these for my Father. My mother, who was a banker, recently passed. My father is not good at managing money, and I'm afraid he will be broke within a few years if I don't set him up with something like an annuity that pays out a monthly distribution. However, my father refuses to consider an annuity because he wants to leave something behind for the grandkids (my nieces and nephew) when he passes (not likely soon in my opinion). He is 71 and still working, but his business does not generate any significant revenue; it's simply something he enjoys and keeps him busy.
Thanks to my mother, he has $400K to $500K in various IRAs and taxable accounts, and I do not want to be responsible for managing these funds. He receives approximately $1900 per month Social Security (after tax and Medicare deductions), and I estimate his monthly expenses are approximately $3500 to $4000. I was thinking of having him put $350K into one of the Vanguard Managed Payout funds. This would make the money less accessible to him and give him a monthly payout that would encourage him to live within his means.
I would appreciate any thoughts or advice on how to manage this situation. My biggest fear is that he will run through the money within five years, and living with me and my wife is not going to be an option.