What would you do?

[Sunset]

With money I wouldn't touch for decades if ever (since you cannot rule out rare expensive diseases), I'd put it in VTI.

As for donating to charity, I'd want to VET them carefully, and then donate while I'm alive a bit each year with specific instructions. Then if they mis-use the money, find another charity.

I recall the story of the University worker, who left millions to the University, which promptly used about 95% of his donation for NOT what he wanted.

 

[NW-Bound]

I recall the story of the University worker, who left millions to the University, which promptly used about 95% of his donation for NOT what he wanted.

Well, he is dead so he does not know. And what you don't know can't hurt you.

 

[Souschef]

I am sending our children some of the money now, when they most need it. Kids are in their 50's. One has 2 boys in college, another one has our 4 year old granddaughter.
We get about 70K between SS and pensions, so not much more is needed.
I also do a lot of QCD's because it saves me 25 to 30 % on the donations.

 

[HFWR]

Won’t be happening, but if it does I’ll “blow that dough”!

 

[GravitySucks]

I would talk to an elder law attorney and protect it from being used to keep me alive the last 3 weeks of my life.
Keeping it at your 75/25 seems reasonable to me.

 

[meleana]

If I absolutely would not need it I would give it to our son- however an atty would recommend to do it- so he could buy a place of his own and have money for retirement.


The rest I would just keep safely tucked away- some invested, some in cash- for an inheritance for him.

 

[street]

Thanks and I really do appreciate your honest replies. I'm sure everyone here has some of the same issues and concerns as I do. I have a ranch I would like to give to my son also but not sure how to go about that either. LOL

My wife doesn't like to visit about the future with our holdings. We do have a will and of course everything would go our son when we both are done.

 

[OldShooter]

... I have a ranch I would like to give to my son also but not sure how to go about that either. LOL ...

A large, illiquid asset like that may require some estate tax planning. It would in our state, which has an estate tax that starts at a much lower point than the Feds do. Hopefully you have or will consult an attorney.

 

[Chuckanut]

I would invest it using a 60/40 AA. Every year I would take a percentage of the total value (probably 5 to 10%) give it others who need it more than I do. That could be family, friends, assorted good causes, etc.

I would have a good time giving it away. I might do things like the doughnut guy, who bought a few dozen doughnuts every week, went someplace in his town and just gave them away.

 

[Stormy Kromer]

OP, I have a bucket like you described, only not as large. It is not in a qualified plan, just a plain old Vanguard account.

It is invested 100% in Vanguard Tax Managed Capital Appreciation Fund. This is a total stock market fund that is geared towards generating lower annual taxable income. Since it is going to heirs they'll get a stepped up basis. I thought about putting some in Vanguard International, but I figured that most companies in the Tax Managed Capital Appreciation Fund are doing business globally anyway.

I don't worry about being 100% in equities at all. (I'm 53) If I die in a down market my heirs will still get the same number of fund shares and will have time to let them appreciate again.

I also plan on starting to give these funds to my two heirs when I turn 70.

 

[Katiek]

If you had 2 million in your portfolio that you might never need how would you invest it ( AA percent etc.) and what plans would you have for the money?

If I "might" never need it, I'd invest it similar to may asset allocation. Because that assumes I might need it at some point as well. In fact, I'd probably only need it if everything went very badly in the markets, so I might consider having at least part of it in extra safe investments if i wasn't sure I already had a very reliable cushion.


I I were sure (or at least pretty darn sure) that I would never need it (or want it), then I'd figure who is going to inherit the money and invest it as if I were in their position.

 

[joeea]

My Roth is 100% in equities, most likely I won’t be needing it. But my traditional IRA has much lower equities. So if you have Roth IRA, invest for your heirs, otherwise keep investing with your AA.

Why would you use a different asset allocation for your Roth account? It's all just money.

 

[VanWinkle]

Why would you use a different asset allocation for your Roth account? It's all just money.

If you have a 2 year timeline for the money, think cash instruments.

If you have a 50 year timeline for the money, think equities.

If your children are the beneficiaries, I would use the Roth account

to give them tax free income in 40-50 years. Equities fit the timeline.

I think you already knew the answer from your prior posts.

VW

 

[brett]

We invested in equities. Managed investment.

Our intention is to provide FIRE funds for both our children and to provide for our grandchildren's post secondary education. 15-20 years away so we believe that the equity market is the best place long term.

 

[KrisS]

charitable giving accounts/plans

I know paying for advice is not popular around here, but I do suggest that finding someone to advise on estate planning is a good idea at the point. Engaging with someone who works with people in the same range of your net worth as estate size is usually as important, and relevant, as state & federal laws really. This feels very important in your situation - particularly if your spouse does not want to engage on this kind of planning. It is also a great opportunity to get your son involved. Structuring real estate assets, considering inheritance vehicles and taking advantage of annual/lifetime tax-free giving will mean you and your heir(s) will ultimately hang on to a lot more of what you have earned that if you don't. A will does ensure your wishes are adhered to, but it does not mitigate the tax implication of those wishes.

Also would like to suggest that if you are not currently engaged in philanthropy, this sounds like a great time to start. If you want an in-year tax advantage or like the idea of a "bucket" to play with for charity, I can recommend charitable giving accounts (Schwab offers one as do others). I think the minimum to open is usually around $10k. You are complete control of who the money goes to, but it can assist with creating a "budget" for charity.

Tax advantages around philanthropy are something to explore/take advice on (and can be part of your estate plan of course). My personal view is philanthropy is a vital part of financial planning. It can also open routes to social interactions as networks abound to engage with like-minded folks in similar financial situations.

 

[gayl]

If you had 2 million in your portfolio that you might never need how would you invest it ( AA percent etc.) and what plans would you have for the money?

Call it a legacy account and stick 60 SPY / 20 SCHF (International Equity Index) / 20 PWZ (tax free CA bond fund)

 

[TomH]

With 2 million to invest, I would have an emergency fund of $200,000. Then I would invest about 1 million in commercial properties. Next I would have $500,000 in dividend stocks and then $300,000 in cryptocurrencies.

 

[gayl]

With 2 million to invest, I would have an emergency fund of $200,000. Then I would invest about 1 million in commercial properties. Next I would have $500,000 in dividend stocks and then $300,000 in cryptocurrencies.

Yeah. I guess if you have an extra 2m laying around you could 'gamble' 15% on cryptocurrency. After all its down from 20k to around 6k so it might recover faster than the other 85%? [emoji15]

 

[pb4uski]

Why would you use a different asset allocation for your Roth account?....

Tax efficiency... equities have higher returns and if the equities are a Roth account then that higher return is tax free. Having Roths be 100% equities is not uncommon... and having fixed income in tIRAs results in teh total being balanced to the target AA.

 

[Dtail]

Tax efficiency... equities have higher returns and if the equities are a Roth account then that higher return is tax free. Having Roths be 100% equities is not uncommon... and having fixed income in tIRAs results in teh total being balanced to the target AA.

+1

 

[street]

Some good advise once again, thanks.