Mom needs help

[JohnnTexas]

Hi All, looking for some advice for my mom. My dad passed away 9 months ago. Mom is 87 yrs old. Dad had an IRA at Fidelity that was self managed. Mom doesn't know a lot about investing so she was talked in to moving the money to a managed account at Fidelity. Today she called me to say she doesn't like the fact that she is paying almost $4K in annual fees.
I suggested first thing is get out of the managed account and move to a Non managed account. She has about $420,000 in this account.
She also said that she thinks she might want to move all of this from the IRA managed account to a IRA CD at a local bank paying 1.5% for 18 months (sleep better at night knowing she won't lose the principle. She didn't really understand the meaning of inflation until I explained it to her and how she is barely keeping up with inflation being all in CD's)
I don't know all of her financial details as I live out of state. I will be heading home for the holiday weekend and plan to spend some time with her and review what she has. I believe her annual expenses are about $55,000. House is paid for and worth about $350K.
Not sure what her SS amount is and I believe she has a small pension but will also verify this.
I am thinking she can move about $100,000 to the CD this year and put the rest in Mutual Fund at Fidelity with an Assest Allocation of 40% equities and 35% bonds and 25% cash(cd's for 18 ,on this and then reassess).
I also need to see what her RMD amount will be.
Any suggestions on a better set up for her? She is fairly health for 87 and wants to stay in her house (hates the thought of a nursing home or a retirement center).
She wants to preserve as much principle as possible as she doesn't know how long she will need it to last and what her needs might be I her final years.
Thanks for any suggestions and direction.

 

[broadway]

Fidelity has some index funds so I would use that for equities.

You'll want to get a better idea of her expenses.

She has no CDs?
What about money market fund for emergencies?

 

[JohnnTexas]

She does have probably $50k in cd's already and some cash reserves (local savings and checking account)for her day to day expenses.

 

[Texas Proud]

Two lines of thought...

Do what you say since you want to look out for inflation...

OR, do what SHE wants since she is late in life and really is not that concerned with inflation...

I would do what makes HER sleep better at night, not what you want to do...


If you go your way, do very low cost index funds that Fidelity has.... do not be aggressive with the stock or bond portion... a total stock and total bond is all you need....

 

[Hermit]

Do a laddered CD for 10 years based on her living expenses after SS, pension and any other income. Keep adequate emergency money available as needed for medical and house expenses, etc. Invest the rest very conservatively and make sure it is accessible in case she does need to move to a nursing home. Add 5 years to the CD ladder as needed. I don't think she needs to worry a whole lot about inflation.

 

[Blue Collar Guy]

Hi All, looking for some advice for my mom. My dad passed away 9 months ago. Mom is 87 yrs old. Dad had an IRA at Fidelity that was self managed. Mom doesn't know a lot about investing so she was talked in to moving the money to a managed account at Fidelity. Today she called me to say she doesn't like the fact that she is paying almost $4K in annual fees.
I suggested first thing is get out of the managed account and move to a Non managed account. She has about $420,000 in this account.
She also said that she thinks she might want to move all of this from the IRA managed account to a IRA CD at a local bank paying 1.5% for 18 months (sleep better at night knowing she won't lose the principle. She didn't really understand the meaning of inflation until I explained it to her and how she is barely keeping up with inflation being all in CD's)
I don't know all of her financial details as I live out of state. I will be heading home for the holiday weekend and plan to spend some time with her and review what she has. I believe her annual expenses are about $55,000. House is paid for and worth about $350K.
Not sure what her SS amount is and I believe she has a small pension but will also verify this.
I am thinking she can move about $100,000 to the CD this year and put the rest in Mutual Fund at Fidelity with an Assest Allocation of 40% equities and 35% bonds and 25% cash(cd's for 18 ,on this and then reassess).
I also need to see what her RMD amount will be.
Any suggestions on a better set up for her? She is fairly health for 87 and wants to stay in her house (hates the thought of a nursing home or a retirement center).
She wants to preserve as much principle as possible as she doesn't know how long she will need it to last and what her needs might be I her final years.
Thanks for any suggestions and direction.

she was able to figure out that she was paying 4k in fees and doesnt understand inflation? I think she is way sharper than you give her credit.

 

[Blue Collar Guy]

Hi All, looking for some advice for my mom. My dad passed away 9 months ago. Mom is 87 yrs old. Dad had an IRA at Fidelity that was self managed. Mom doesn't know a lot about investing so she was talked in to moving the money to a managed account at Fidelity. Today she called me to say she doesn't like the fact that she is paying almost $4K in annual fees.
I suggested first thing is get out of the managed account and move to a Non managed account. She has about $420,000 in this account.
She also said that she thinks she might want to move all of this from the IRA managed account to a IRA CD at a local bank paying 1.5% for 18 months (sleep better at night knowing she won't lose the principle. She didn't really understand the meaning of inflation until I explained it to her and how she is barely keeping up with inflation being all in CD's)
I don't know all of her financial details as I live out of state. I will be heading home for the holiday weekend and plan to spend some time with her and review what she has. I believe her annual expenses are about $55,000. House is paid for and worth about $350K.
Not sure what her SS amount is and I believe she has a small pension but will also verify this.
I am thinking she can move about $100,000 to the CD this year and put the rest in Mutual Fund at Fidelity with an Assest Allocation of 40% equities and 35% bonds and 25% cash(cd's for 18 ,on this and then reassess).
I also need to see what her RMD amount will be.
Any suggestions on a better set up for her? She is fairly health for 87 and wants to stay in her house (hates the thought of a nursing home or a retirement center).
She wants to preserve as much principle as possible as she doesn't know how long she will need it to last and what her needs might be I her final years.
Thanks for any suggestions and direction.

she was able to figure out that she was paying 4k in fees and doesnt understand inflation? I think she is way sharper than you give her credit. Many of us in here have paid too high of fees for years before we moved our money to low cost funds, your mom is only paying them for 9 months.

 

[Car-Guy]

[-]Two lines of thought...

Do what you say since you want to look out for inflation...[/-]

OR, do what SHE wants since she is late in life and really is not that concerned with inflation...

I would do what makes HER sleep better at night, not what you want to do...

+1 (Based on the limited info provided, it sounds to me as if she knows what she's doing and it seems reasonable.)